Vehicle service plan inflation proof?

drusy_2

Hello everybody, now this isn’t the most financially devastating problem I am going to have to face, but it is a niggle and I would appreciate your thoughts. I bought my car in November 2010. At the same time I took out a service plan, over 5 years, which cost 1332.46 including VAT. This is paid monthly and in all the literature it is ‘inflation proof’. ‘Prices are fixed for the duration of the plan’.
Today I noticed that my monthly direct debit had increased from £23.79 to £24.30, I contacted the company EMAC LTD, and their representative explained that there had been an increase in VAT to 20% and the increase in the monthly premiums reflect this increase.
I checked my paper work and can find no mention that any increase in VAT will have to be paid for by me. In fact the VAT is shown as having been paid in full at the start of the agreement.
Your thought please, but I will be writing to Emac and Hyundai who sold me this.
Regards Drusy

Hintza

The company is not charging you any more. They are correct. They need to charge you VAT at the prevailing rate, if VAT went down then they would charge you less.

Pointless writing to them as it is not within their powers to do anything about it, why have you only noticed this now they will have been charging you this for months.

Hintza

Sales that span the change in rate
There are special rules for sales which span the change of rate. If you provided goods or services before 4 January 2011 and raised a VAT invoice on or after that date you can choose to account for VAT at 17.5 per cent. You don't need to tell HM Revenue & Customs (HMRC) if you do this.

Services you started before 4 January 2011 but finished afterwards
If you started work on a job before 4 January 2011 but finish afterwards you may account for the work done up to 3 January 2011 at 17.5 per cent and the remainder at 20 per cent. If you choose to do this you will have to be able to demonstrate that the apportionment is fair.

agrinnall

drusy wrote: »

I checked my paper work and can find no mention that any increase in VAT will have to be paid for by me. In fact the VAT is shown as having been paid in full at the start of the agreement.

Did you actually pay the VAT at the start of agreement? i.e. make an extra payment of around £198? If so then I think you could argue that the apportionment is not fair, as per Hintza's post.

drusy_2

I understand what you are all saying and how the excise collection works. I suppose that I am looking for an anomaly, in the circumstances where the provider of a service states (prior to the tax increase), that the provision of the service at the price agreed is:-‘Inflation proof’. ‘Prices are fixed for the duration of the plan’.
‘Peace of mind and predictable cost’
Given that the sales pitch gives these gaurantees, isn't it possible to argue, that the provider, should meet the additional cost in the hike in VAT?
Regards Drusy

Hintza

drusy wrote: »

I
Given that the sales pitch gives these gaurantees, isn't it possible to argue, that the provider, should meet the additional cost in the hike in VAT?

No................

Did you have the same argument with your phone provider, your mobile phone company etc?

agrinnall

As you didn't bother to answer my question I assume you are in fact paying the VAT each month, therefore Hintza's last post is where you stand.

drusy_2

Thankyou for your comments.

Regards Drusy