Cooling off vs 30 day notice - O2 mobile contracts

macman

If you can afford to buy out the contract in one payment, then why take it out in the first place?
Wouldn't a SIM-free handset and a monthly SIM-only contract be cheaper over the minimum term?

System

I take it's one of the new 'Refresh' tariffs.

Basically, you can cancel the airtime part of the contract without charge and just pay the equivalent of a non-subsidised handset. People have figured out that this is sometimes cheaper than sim free or pay as you go cost for the same handset.

Not quite as insane as it sounds.

Buzby

grumbler wrote: »

It's not a myth. It's a fact proved by many reports, actual bills for Orange and Vodafone and also by web reps for the latter.

Also, in terms of 'discount', VAT is 16.67% of the total amount, not 20%.

This will be of be of interest to HMRC - as only they have the ability to waive tax - not any 'web reps' who lets face it, probably have no idea how to fill in a VAT return, never mind know how the tax should be applied.

Just as we constantly see people complaining their 2 year mobile contract rolled on without their permission (because it isn't a 2 year contract), this is the same - VAT cannot be rebated where a charge as been legitimately applied.

Semantics vs the 20% & 16.67% (as a VAT inclusive amount) is pointless - are you seriously suggesting that the consumer is entitled to a full rebate of 16.67% if they choose not to complete their contract? All sales are at a standard Rate with VAT at 20% added - to provide the customer with a cost that embraces the goods and the tax.

Unless the retailer is discounting the service, the tax is not affected - as for Vodafone's understanding of tax and VAT, I'd suggest they are he last company to be giving advice to anyone, if they want to stay compliant that is.

grumbler

Buzby wrote: »

This will be of be of interest to HMRC - as only they have the ability to waive tax - not any 'web reps' who lets face it, probably have no idea how to fill in a VAT return, never mind know how the tax should be applied.

Probably, but this is not a taxation board. What matters here is what's going on in practice, not in theory. Even in the final bill they list the ETC as VAT exempt.

Semantics vs the 20% & 16.67% (as a VAT inclusive amount) is pointless - are you seriously suggesting that the consumer is entitled to a full rebate of 16.67% if they choose not to complete their contract?

No, I am just saying that if compared to the apparent O2 10% discount, 'waived' VAT is equivalent to 16.67%. Besides, Vodafone give extra 2% discount on the top.

Unless the retailer is discounting the service, the tax is not affected - as for Vodafone's understanding of tax and VAT, I'd suggest they are he last company to be giving advice to anyone, if they want to stay compliant that is.

There was a thread on this where people more experienced in taxation then you and me said the opposite, but I don't care about the theory.

Cycrow

its not a sale, its a service, and services that cant be used can not have VAT on them.

when you buyout the contract, you are not actually buying anything, you are just paying money to get out of an agreement

myrealusernameunavailable

Heng_Leng wrote: »

I take it's one of the new 'Refresh' tariffs.

Basically, you can cancel the airtime part of the contract without charge and just pay the equivalent of a non-subsidised handset. People have figured out that this is sometimes cheaper than sim free or pay as you go cost for the same handset.

Not quite as insane as it sounds.

you caught me there!! yes thats the one. doing it this wa, the cell will cost me lesser than other options in the market.

Anyways thanks for all your replies. i have got it sorted.

Tony5101

I'm sure that they'll soon close this little loophole and introduce a minimum term of say 6 months or so - to give them enough time to balance out the handset subsidy....

myrealusernameunavailable

Tony5101 wrote: »

I'm sure that they'll soon close this little loophole and introduce a minimum term of say 6 months or so - to give them enough time to balance out the handset subsidy....

i am sure they will. but until then, people can use this and save some money!

Jakg

chanz4 wrote: »

He doesn't want to buy out, just paid in advance

You can pay in advance with O2 (I used to put £100 in my account every months with a Cashback Credit Card), but theres no discount.