Three mobile. VAT and Early Termination Fee.

grumbler

They are not different to every other provider. I think, e.g., O2 do the same. So do many virtual networks.
Orange do exclude VAT from the ETC. AFAIK, so do Vodafone.

im-lost

to clear it up, it would be helpful if you stated what your normal monthly price is... without that people are just giving their opinions on what it should work out as.

is it £12.50? something tells me its not, because due to the increases they have had, you end up with a bill of £xx.24 or £xx.74 depending on what your previous monthly price was, before their increases.

three don't charge vat on the early termination fees.

tokaten

im-lost wrote: »

to clear it up, it would be helpful if you stated what your normal monthly price is... without that people are just giving their opinions on what it should work out as.

is it £12.50? something tells me its not, because due to the increases they have had, you end up with a bill of £xx.24 or £xx.74 depending on what your previous monthly price was, before their increases.

three don't charge vat on the early termination fees.

Actual monthly bill inc VAT is 12.43. ETF is 74.58.

A senior customer complaints advisor said VAT is payable. In fact he said it again and again. And said to ignore the 0.00% VAT next to the ETF on the bill as it was wrong and should say inclusive of VAT at 20%. Customer services and customer advisor all said the same as well. That VAT was payable and that the bill was wrong. :mad::mad::mad::mad::mad:

tokaten

Oh and they all said ETF was 6 months to pay. No other fees.

tokaten

JasonLVC wrote: »

The VAT cannot be 0% (although accept many billing systems will substitute 0%/zero rate for outside the scope), so it appears Three are stating the ETF is either zero rated or not subject to VAT - so VAT isn't being charged.

They now say that VAT isbeing charged but the figure is sstill £75 but that is wrong anyway as they are supposed to give you a 3% discount (as per contract conditions) so it should at least be £2.25 less than stated.

The very fact this invoice now has two errors on it - the VAT/no VAT issue and a missing discount does not instil any confidence in paying it, although I suspect this discussion is now merely academic in nature, but interesting nonetheless.

Customer complaints did concede that the 3% discount should have been added. And would add this as per t and c's. but said VAT was payable.

grumbler

tokaten wrote: »

A senior customer complaints advisor said VAT is payable. In fact he said it again and again. And said to ignore the 0.00% VAT next to the ETF on the bill as it was wrong and should say inclusive of VAT at 20%. Customer services and customer advisor all said the same as well. That VAT was payable and that the bill was wrong. :mad::mad::mad::mad::mad:

Again, for you this just means that the amount they charge (not subject to VAT) is the same as the cost of all remaining months with VAT. Whether they pay VAT to HMRC or not is HMRC's business, not yours.

JasonLVC

I think Grumbler is right/spot on...I've had a nights sleep to dwell on things and agree with the G.

OfCom state ETF cannot be any more than the remaining contract so if contract was £10 + £2 VAT (£12) and you had 3 months left then the ETF can go one of two ways :-

1. ETF is £10 x 3 = £30 with no VAT as treated as compensation and deducting the VAT that would have been charged as there is no future supply being made thus complying with the VAT rules about terminated contracts.

2. ETF is £12 x 3 = £36 with no VAT charged, treated as a pure compensation payment which just happens to equal the full remaining months (incl. VAT) of the contract. No mention of VAT on invoice but the value is £36 which is the equivalent of the monthly charge plus VAT. This complies with the VAT rules too as no VAT charged (as compensation) but the level of compensation just happens to be the contract value incl. the VAT. I trust the OP can see the very subtle difference.

So I think the original 3 invoice showing VAT at 0% and £75 is probably correct, the 0% being technically wrong but meaning "no VAT". The £75 is the VAT inclusive amount but Three are choosing to charge you a non-VATable penalty that is the full value of your remaining contract. If 3 are charging VAT and showing it, I still think that is wrong in VAT law as no supply = no VAT but as Grumbler states, if being charged anyway it'll just get paid over to HMRC who aren't going to complain are they?

grumbler

JasonLVC wrote: »

...If 3 are charging VAT and showing it, I still think that is wrong in VAT law as no supply = no VAT but as Grumbler states, if being charged anyway it'll just get paid over to HMRC who aren't going to complain are they?

I might be misunderstanding you, but my scenario was that they charge the customer £75 (in this case) and don't pay any VAT to HMRC on/from this amount.

JasonLVC

grumbler wrote: »

I might be misunderstanding you, but my scenario was that they charge the customer £75 (in this case) and don't pay any VAT to HMRC on/from this amount.

You understand fine, I think like you, Three are charging £75 no VAT and don't pay anything over to HMRC as no VAT charged, the £75 is just a flat amount.

Three have confused things by the CS mentioning the invoice is wrong and should have VAT on it, I don't think it should. CS are confusing the issue.