O2 Bill and Credit - VAT question

Peachey169

Hi there

I have a query and no idea as to where to direct it, so maybe you might be able to assist?

Issue - O2 Bill - incorrect VAT calculation?

Background

Moved from Virgin mobile to O2 and the porting was a nightmare, leaving me with no mobile for 5 days - as a 'gesture of goodwill, o2 credited my bill with £10

My tariff is £12.50 + VAT, so £15 pcm

Bill comes in with an amount of £5

£2.50 Bill

£2.50 VAT

Is this correct - they claim that they charge the full amount of VAT on my tariff rather than the amount being billed for the period?
They claim that the goodwill £10 is not subject to VAT - really?

Should the bill really have £2.50 VAT on it or £0.50p?

PHK

It should be your bill (£15) less a credit of £10 = £5  

Think they way they've showec it is awkward

DullGreyGuy

Peachey169 said:

Bill comes in with an amount of £5

£2.50 Bill

£2.50 VAT

Is this correct - they claim that they charge the full amount of VAT on my tariff rather than the amount being billed for the period?
They claim that the goodwill £10 is not subject to VAT - really?

Yes really, tax on value added doesnt apply to gestures of goodwill... no value has been added to be taxed plus you arent VAT registered to collect that tax and pay it on to HMRC given the flow of money for that component is to you

Airtime £12.50
VAT £2.50
Gross £15.00
GoGW (£10.00)
Remainder to pay £5.00