Paying VAT on account top-ups

hate-banks

Hi,
I hope this is the correct thread for this question, can't find anything better... 

Quick question pls: I enrolled for a virtual phone number company. The way it works is that I top-up my account with money and they charge me once a month for the extra phone number (the service). 

I wondered if it was legal to charge me VAT on the account top-up on top of charging me VAT on the service itself. Cause topping up my account is not purchasing, the purchase comes once a month. Why should I pay VAT on that? 
So basically when I top-up my account with £5, they charge me £6.20 but my account shows £5. And then, when they charge my account for the service at the end of the month, they charge me full price £3, which includes VAT as well. 

Thank you

Kattekwaad

Sounds very strange.  Who are they and why are you using them?

JJ_Egan

Business to business ??

davidmcn

OP, are you VAT-registered? If not then how the supplier accounts for the VAT isn't really your concern, what matters is whether the (VAT-inclusive) price they're charging you matches what you were told. And if you're a business then this isn't a consumer rights issue anyway. I don't really follow your description though of what the problem is, maybe try explaining it again in case I'm being thick.

zoob

£5.00 plus Vat = £6.00 not £6.20 

hate-banks

Kattekwaad said:

Sounds very strange.  Who are they and why are you using them?

Well, I will pass on the "why", but they are Zadarma, a Bulgarian company, they offer SIP services. zoob said:

£5.00 plus Vat = £6.00 not £6.20 

Yes sorry. 

JJ_Egan said:

Business to business ??

No, I'm an individual. 

davidmcn said:

OP, are you VAT-registered? If not then how the supplier accounts for the VAT isn't really your concern, what matters is whether the (VAT-inclusive) price they're charging you matches what you were told. And if you're a business then this isn't a consumer rights issue anyway. I don't really follow your description though of what the problem is, maybe try explaining it again in case I'm being thick.

No, I'm an individual. It is my concern because they are charging ME for VAT! So if I top up my account for £6.20, then I want £6.20 to appear on my account, not £5. 
If you top up your PAYG mobile for £10, you expect £10 to show on your account, right? Not £10 minus the VAT! This is what they're doing here. 

davidmcn

if I top up my account for £6.20, then I want £6.20 to appear on my account, not £5. 
If you top up your PAYG mobile for £10, you expect £10 to show on your account, right? Not £10 minus the VAT! This is what they're doing here.

What happens when they debit the cost of calls from your credit? Are they deducting VAT-exclusive charges? Their tariff here is VAT-exclusive.

hate-banks

They charge me £1 for VAT because I'm in the UE!! Is this normal? 

hate-banks

davidmcn said:

if I top up my account for £6.20, then I want £6.20 to appear on my account, not £5. 
If you top up your PAYG mobile for £10, you expect £10 to show on your account, right? Not £10 minus the VAT! This is what they're doing here.

What happens when they debit the cost of calls from your credit? Are they deducting VAT-exclusive charges? Their tariff here is VAT-exclusive.

Thanks for your help (and others!!)
I'm renting a phone number (SIP Virtual Number) from them which costs £3 a month including VAT and that's what they are charging me, £3 including VAT. So i'm paying VAT on the service itself AND also whenever I top up my account (we can't pay directly with our card, we have to top up our account and they take the money out of it... weirdos). 

hate-banks

So I would like to know if this is legal to charge VAT when topping up an account (before paying for the service itself). As I mentioned earlier, when we top up, let's say, a PAYG mobile account, there is no charge, if you pay £10 then you have £10 in your account. 
As you can see on the screenshot, when you top up £5, then charge you £6!!

davidmcn

hate-banks said:

They charge me £1 for VAT because I'm in the UE!! Is this normal? 

If you mean the EU, yes, it's normal to pay VAT when you buy goods or services from somebody else within the EU.

I suspect what's happening is that you're getting confused because the call charges are VAT-exclusive, and it all works out in the end in the same way as you expected. But without seeing the bill it's difficult to tell.