Termination Fee, Orange

Mickyk

Quick and easy question.

If I am cancelling my mobile contract, and happy enough to pay a termination fee, should it be full cost, ie Contract @ £20pm x18m or would be minus of VAT ie £16.67 x 18m ?

mrs_B_5

What it should be and what it will be are probably 2 different things! I believe its the remaining line rental that Orange require to be paid as a temination fee.

grumbler

You don't pay VAT apparently.

simax

As above, no VAT payable. Also, they may offer an additional discount.

Techhead_2

Isn't the VAT thing an urban myth, based on what a few providers used to do, for a short while, before OFCOM issued guidance?

drbesty

They can only charge you VAT if they provide the service, if you pay the contract off early they are'nt providing you a service, hence you pay no VAT

Toe-Jam

drbesty wrote: »

They can only charge you VAT if they provide the service, if you pay the contract off early they are'nt providing you a service, hence you pay no VAT

Sound logic, but incorrect. They have the right to charge you what you would normally pay every month, and you pay your bill inclusive of vat, so it can be included in the termination fee.

Buzby

The 'No VAT' is a fallacy. It had nothing to do with them not providing a service, and has more basis in urban legent than fact. There is no way billed phone service can be zero rated for VAT purposes.

What usually happens, is that the network will provide a recalculation, usually offering a 5% discount for bundles not taken or unconsumed, and it is this that reduces the VAT liability, nothing else.

grumbler

VAT is 16.7% of the total amount, not 5%.

It's a mystery why Toe-Jam decided to dig out this superficial thread. There were more substantial polemics like, say, A very quick question re; VAT and termination

Buzby

Agreed, but like Spring, it comes a-round when you least expect it!

Toe-Jam

grumbler wrote: »

It's a mystery why Toe-Jam decided to dig out this superficial thread.

I dug it out because the information was wrong, just like your perpetual bullying of other peoples posts on here but that's a whole other story.