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  • FIRST POST
    • MSE Guy
    • By MSE Guy 13th Jan 11, 3:24 PM
    • 1,628Posts
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    MSE Guy
    MSE News: Virgin Media uses VAT rise to retrospectively hike phone prices
    • #1
    • 13th Jan 11, 3:24 PM
    MSE News: Virgin Media uses VAT rise to retrospectively hike phone prices 13th Jan 11 at 3:24 PM
    This is the discussion thread for the following MSE News Story:

    "The firm is charging customers the new, increased tax rate for phone calls that were made before the increase ..."

    Last edited by MSE Guy; 13-01-2011 at 4:37 PM.
Page 1
    • Heinz
    • By Heinz 13th Jan 11, 3:50 PM
    • 11,038 Posts
    • 4,449 Thanks
    Heinz
    • #2
    • 13th Jan 11, 3:50 PM
    • #2
    • 13th Jan 11, 3:50 PM
    Why am I not surprised?
    Time has moved on (much quicker than it used to - or so it seems at my age) and my previous advice on residential telephony has been or is now gradually being overtaken by changes in the retail market. Hence, I have now deleted links to my previous 'pearls of wisdom'. I sincerely hope they helped save some of you money.
    • bob_a_builder
    • By bob_a_builder 13th Jan 11, 3:57 PM
    • 1,688 Posts
    • 816 Thanks
    bob_a_builder
    • #3
    • 13th Jan 11, 3:57 PM
    • #3
    • 13th Jan 11, 3:57 PM
    The telecoms giant says it has consulted HM Revenue and Customers which Virgin says has given it the all clear.
    That'll be the same HMRC who waived the need for Vodafone to repay a 6 Billion tax bill
    • bob_a_builder
    • By bob_a_builder 13th Jan 11, 3:58 PM
    • 1,688 Posts
    • 816 Thanks
    bob_a_builder
    • #4
    • 13th Jan 11, 3:58 PM
    • #4
    • 13th Jan 11, 3:58 PM
    Will this extra cash taken go to the Government or to Virgin Media.
  • The voice of reason
    • #5
    • 13th Jan 11, 4:09 PM
    • #5
    • 13th Jan 11, 4:09 PM
    It should all go to the government because it's VAT so Virgin don't actually benefit in any way - think this is a misleading article
    • MSE Guy
    • By MSE Guy 13th Jan 11, 4:29 PM
    • 1,628 Posts
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    MSE Guy
    • #6
    • 13th Jan 11, 4:29 PM
    • #6
    • 13th Jan 11, 4:29 PM
    It should all go to the government because it's VAT so Virgin don't actually benefit in any way - think this is a misleading article
    Originally posted by The voice of reason
    The money goes to the taxman but it still means consumers are overcharged as they should be paying the 17.5% rate.
    • VT82
    • By VT82 13th Jan 11, 4:33 PM
    • 1,041 Posts
    • 878 Thanks
    VT82
    • #7
    • 13th Jan 11, 4:33 PM
    • #7
    • 13th Jan 11, 4:33 PM
    So Virgin don't actually gain from overcharging their customers - the only reason they did it was presumably to save on the admin costs of building a computer program which would calculate the call costs correctly? And in doing so, they have created bad PR about themselves. And will probably have caused an increase in call volume and 'goodwill' refunds that will amount to more than they would have had to pay to fix the issue in the first place.

    That's pretty dumb.
    • glider3560
    • By glider3560 13th Jan 11, 6:27 PM
    • 3,811 Posts
    • 2,486 Thanks
    glider3560
    • #8
    • 13th Jan 11, 6:27 PM
    • #8
    • 13th Jan 11, 6:27 PM
    The money goes to the taxman but it still means consumers are overcharged as they should be paying the 17.5% rate.
    Originally posted by MSE Guy
    Still misleading as the headline says "...retrospectively hike phone prices". Phone prices haven't increased - the VAT charged on them has. When prices are given ex. VAT anyway, I find the headline very misleading.

    In fact, the Virgin price list even says "Please note that VAT is applied at the rate prevailing when your bill is prepared, not when the call is made."

  • flyingscotno1
    • #9
    • 13th Jan 11, 6:47 PM
    • #9
    • 13th Jan 11, 6:47 PM
    Still misleading as the headline says "...retrospectively hike phone prices". Phone prices haven't increased - the VAT charged on them has. When prices are given ex. VAT anyway, I find the headline very misleading.

    In fact, the Virgin price list even says "Please note that VAT is applied at the rate prevailing when your bill is prepared, not when the call is made."
    Originally posted by glider3560
    I agree, I thought the phone prices had been increased and hidden in VAT rise when I saw the title. A more accurate headline would be 'Virgin overcharges VAT to customers'.
    • dtaylor84
    • By dtaylor84 13th Jan 11, 7:16 PM
    • 635 Posts
    • 519 Thanks
    dtaylor84
    The "82p VAT" added to his bill was the full 20%, they would have charged 72p anyway. So they added an additional 10p to his phone bill...

    Also the tax point is not necessarily the date the calls were made, so this may not even be overcharging
  • sirmarcus
    Why is any Vrirginmedia customer making phone calls outside of their agreed free monthly usage plan ?

    Via VM, I am able to make free phone calls during evenings and weekends. If I have to make calls during any other time (i.e. during the day), I always use http://www.18185.co.uk/index2.php.

    I save a money doing this and I have no sympathy with any VM customers, whom make calls outside of their free plans.
    • corbyboy
    • By corbyboy 13th Jan 11, 7:52 PM
    • 1,137 Posts
    • 1,378 Thanks
    corbyboy
    What a nonsense "news story".

    The VAT rate's usually determined when you pay or when a tax invoice is raised. When the latter administrative function happens is down to the retailer.
    So if you pay now but receive the goods in 2011, 17.5% VAT is due.
    Where did I take this quote from? Another MSE news article that's where.

    You pay the VAT rate of when the bill was raised, not when you used the service. A good example is mobile phones. If you pay your January line rental in December you will pay December's VAT rate even though you receive the service in January. But it works the other way around too, as we can see in this example.

    In fact not only is this not a "stealth price hike" but VM are doing things the way they are supposed to. It's BT, Sky and TalkTalk that are doing things the wrong way, they are just choosing to be kinder to their customers.
    • Taiko
    • By Taiko 13th Jan 11, 8:03 PM
    • 2,553 Posts
    • 2,391 Thanks
    Taiko
    As Corby said, hence why on the invoice it shows tax point date. This is a simple thing, and will apply to all utilities too.
    • cactusdust
    • By cactusdust 13th Jan 11, 9:58 PM
    • 415 Posts
    • 208 Thanks
    cactusdust
    Landlines are awfully expensive nowadays when you factor in the price of mobile phone packages.. even on pay as you go.

    • vikingaero
    • By vikingaero 13th Jan 11, 10:28 PM
    • 10,443 Posts
    • 13,129 Thanks
    vikingaero
    If 1 in 100 Virgin customers makes a complaint and then escalates the complaint to OTELO for the hell of it...
    The man without a signature.
  • shuey
    once again well and truely shafted by certain retailers. Always increasing prices and not doing any decent deals and trying to scam the pennies we hold on to , to survive.
    • MSE Guy
    • By MSE Guy 14th Jan 11, 8:29 AM
    • 1,628 Posts
    • 1,255 Thanks
    MSE Guy
    Still misleading as the headline says "...retrospectively hike phone prices". Phone prices haven't increased - the VAT charged on them has. When prices are given ex. VAT anyway, I find the headline very misleading.

    In fact, the Virgin price list even says "Please note that VAT is applied at the rate prevailing when your bill is prepared, not when the call is made."
    Originally posted by glider3560
    Of course the price has risen because people are paying more to use their phone, that's quite simple. As for your second point, Virgin could say "we'll charge you 1 million per call", but that doesn't make it right.
  • mrJ
    Of course the price has risen because people are paying more to use their phone, that's quite simple.
    Originally posted by MSE Guy
    The call charges are listed as +VAT - so they haven't risen at all, what has increased, however, is the VAT that is applied to the call charges.

    The headline is misleading - I read it expecting to see that they increased the prices by more than the VAT increase. eg. if the price was 11.75 before (10+VAT) I'd expect that the price now would be more than 12 (like 12.50 or so) - a very misleading headline!!!

    Like other posters have said, the invoice was raised after the increase took affect so they are valid invoices - Virgin Media have done nothing wrong.

    I'm sure you'll find that BT, TalkTalk, and Sky's pricing would have gone up too inline with the VAT increase since all call charges are listed as +VAT.

    Next up on MSE, a different company that increased their prices by the correct amount due to the VAT increase!
    • corbyboy
    • By corbyboy 14th Jan 11, 12:20 PM
    • 1,137 Posts
    • 1,378 Thanks
    corbyboy
    Of course the price has risen because people are paying more to use their phone, that's quite simple. As for your second point, Virgin could say "we'll charge you 1 million per call", but that doesn't make it right.
    Originally posted by MSE Guy
    Guy, as news editor you really need to be careful about the things that you say. Especially when they are factually incorrect.

    As I stated in post 12 Virgin Media have generated the bills exactly as they are supposed to. Just because BT and the others have done it differently which is to the customers', doesn't mean they are right.

    Here is the quote again:
    The VAT rate's usually determined when you pay or when a tax invoice is raised
    Can you please explain why the above should not be applied to phone bills?
  • alexlyne
    ahh, but despite the above argument on vat dates, Virgin are being especially kind to its customers:

    "In order to make these increases as manageable for our customers as possible, we have rounded down the VAT increases to the nearest penny."

    I'm completely overblown by this goodwill generosity. I can't see how anyone will not be able to manage the increase now.
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