Vodafone VAT

Dragonfly1

But no-where are Vodafone advertising your service for £15.

They are advertising the service for £100 (+VAT) - and you just so happen to have a store gift card for £84. The VAT still needs to be paid on the full amount.

Say you go into Tesco shopping and you buy £100 worth of food. You then pay £20 VAT. (albeit the VAT is incorporated into the shelf price as not to confuse us). The total cost is £120. You then have a £84 deduction. They are not saying their food is only worth £20-£40 - you just so happen to have a store gift card to reduce your bill, but VAT still needs to be paid on the total cost.


EDIT: Just seen your post at number 11, was replying to post 10

Deehem

Ah okay. Thanks to both of you for clearing this up.

Surprised VAT isn't inclusive of the bill in this case though. I believe the words used in store confirmed VAT would be inclusive of the bill total of ~£100 rather than taking the bill up to £120.

Dragonfly1

Deehem wrote: »

Ah okay. Thanks to both of you for clearing this up.

Surprised VAT isn't inclusive of the bill in this case though. I believe the words used in store confirmed VAT would be inclusive of the bill total of ~£100 rather than taking the bill up to £120.

That's a separate issue of you being missold the product in the first place as it is reasonable to expect to be told the 'final' / total price. Perhaps they thought it was for business so quoted without VAT. Doubt there is too much you can do practically to be honest unless you want a long drawn out argument - but that's something to take up with Vodafone.

Check any paperwork you might have from the initial sale/when you signed?

grumbler

Deehem wrote: »

In which case, VAT should be inclusive of the price surely?

I'll use the analogy of walking in to a high street clothing store and seeing 80% off.
I pick up a nice pair of £50 jeans for £10. Good bargain!
I get to the checkout and the price is £20 instead (£10 + the 20% VAT on £50, the original price before discounts, an additional £10).

VAT is applied to the discounted price, not to the original, but in this case it's % discount, not a fixed amount like in your case.

Let's take it for simplicity £60=£50+VAT

£60-80%=£12
(£50-80%)+VAT=£12

mobilejunkie

I'm VAT registered and do my own accounts.

The phone credit was a payment for your own phone. The bill before that deduction is a charge for the contract and liable to VAT (the payment for the phone is just that - a payment, not a reduction in the bill for your contract).

The Vodafone discount must include a VAT credit, which means it must be applied gross from the total bill including VAT, therefore you cannot get the VAT element twice.

If you check your bill you should see the Vodafone discount taken off last, after all the VAT has been applied. I haven't seen your bill, but if that's the case it would explain things and the bill would be correct.

Vodafone

Hi Deehem,

If you'd like me to check your bill, email me via the Contact us form here.

To access the form you'll need to enter the code WRT135.

As well as stating your query in the question box, please also quote "MSE Forum".

Once sent, you'll receive an automated reply with a reference number. Post it on here and I’ll check I've received it.

Kind regards,

Lee

Social Media Comms

Vodafone UK

grumbler

I missed this post...

Dragonfly1 wrote: »

But no-where are Vodafone advertising your service for £15.

They are advertising the service for £100 (+VAT)

Nowhere they advertise price+VAT. All their prices, unless for business customers, include VAT: http://www.vodafone.co.uk/shop/bundles-and-sims/sim-only-deals/index.htm

Say you go into Tesco shopping and you buy £100 worth of food. You then pay £20 VAT.

If I buy £100 worth of food in Tesco, VAT is £16.67 and included in £100.

(albeit the VAT is incorporated into the shelf price as not to confuse us).

Absolutely - because it's irrelevant for us.

mobilejunkie

grumbler wrote: »

If I buy £100 worth of food in Tesco, VAT is £16.67 and included in £100.

Actually, it's not. Food is zero rated.

Mike_J

It depends on how Vodaphone treat the supply. They are the ones making the supply so they dictates 9wihin UK law) how the supply is treated.

If they treat a £100 bill as the supply, and define say £20, as a gift/voucher/compensation/loyalty rebate. then VAT would be due on the £100.

If they define the reduction as a discount then VAT would be due on the £80.

The law states that VAT is due on the value of the supply made by the VAT registered party. There are then about 50-60 sub-paragraphs which define how this is define, all written by lawyers.