Paying off contract early....

dazzaofdagenham

Hi all

I have about 4 months left to run of my T.Mobile contract....However i no longer use as many minutes as the contract allows and find my PAYG SIM is better for me use.

Is there any benefit in letting the contract run vs paying it off early ?

I thought i read somewhere that if i pay it off early then i will not be paying the VAT on the future bills i am paying off?

Anyone ?

Darren

grumbler

Apparently you can save VAT with some networks: A very quick question re; VAT and termination

However, even if you save VAT, I think you are likely to lose at least the same by paying for PAYG airtime.

Early cancellation makes no sense to me.

dazzaofdagenham

Depends on your usage....I was using about 450 mins a month and about 700 texts ( average )

However my main calling circle ( family ) and now on Giffgaff and calls from GG to GG are free...

So our money spent between us has dropped quite a bit,


Darren

Buzby

I don;t see how you can save on VAT. Paying off early still means the contract runs full term, as you would be foolish to ask it to be terminated early preventing you from making use of the inclusive bundle you agreed to pay for. As you have discovered, taking out a contract is rarely a good idea as circumstances constantly change.

grumbler

Buzby wrote: »

I don;t see how you can save on VAT.

Neither do I, but if you check the thread I quoted you'll see that others say that you can.

Buzby

Others have been known to be mistaken!

grumbler

Very strange way to be mistaken:

simax wrote: »

O2 charge VAT, Vodafone and Orange do not. Dunno about the others.

Also, Ann_S, who is known to work for Vodafone, keeps saying again and again the Vodafone don't charge VAT.

It's not that personally I can confirm or refute this. I was always the first to doubt this. Can you?

dazzaofdagenham

It's not a major issue...

I thought firms could not charge you VAT on a service i had not yet received....The contract is up in 3 months...

So i will continue to pay £25 + VAT for that period of time.

Just had a quick calculation...I reckon my household is paying about £50 less per month now that we have moved to GG..

Cant complain at that

darren

Guys_Dad

Dig deep and you will find:-

From T-Mobile
‘Cancellation Charge’ the Charge which totals the rest of the Monthly
Charges for the remainder of the Minimum Term, discounted by 4%;

No mention of VAT though. Point is, if it is a penalty charge, can they apply VAT? Don't know, but it certainly isn't a service.

grumbler

Point is whether they have to pay VAT or not. If they have to pay it, they will charge it.
As I said in the quoted thread, I am no expert, but I don't see any reasons for any charges to be exempt of VAT.

Discount is very understandable because they charge you, but don't provide any services. IMO 4% is a very miserly discount.

Guys_Dad

grumbler wrote: »

Point is whether they have to pay VAT or not.

Actually, first point asked by OP was "Is there any benefit in letting the contract run vs paying it off early ?"

The VAT issue was the second point.

I do agree about the 4% being miserly.