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BT has said it will pass on the benefit to customers of the government’s reduction in VAT charges.

Chancellor Alistair Darling announced in his pre-Budget report that he is cutting VAT from 17.5 per cent to 15 per cent for 13 months from next Monday (1 December).

He said that, with the UK economy officially set to shrink next year, he wanted to soften the blow of a recession.
A BT spokesman said today: “BT will be passing on the benefit of the reduction in the rate of VAT to customers.
“Because customers are billed for rentals in advance, some bills already sent will be at the old rate so we will be adjusting the next bills of those customers affected to reimburse them.
“For potential customers considering subscribing to BT services, we will apply the new rate as soon as it is introduced. Bills crossing over this day will be adjusted accordingly.

“For purchases of items such as phones etc, the VAT rate will be applied according to the date of payment. For example, if a customer purchases and pays before 1 December, they will pay VAT at 17.5 per cent. If a customer buys a product and receives a bill before 1 December, VAT will be charged at 17.5 per cent but they will subsequently receive a VAT credit of the difference in the old and new rates on their bill.”

Good post Nik, but can you say its source?

Hi

I dont remember where exactly I picked this up from, but the BT's website also mentions here (http://bt.custhelp.com/cgi-bin/bt.cfg/php/enduser/cci/bt_adp.php?p_sid=AFiUfMjj&cat_lvl1=761&cat_lvl2=1183&cat_lvl3=1184&p_cv=3.1184&p_cats=761,1183,1184&p_faqid=12599&s_cid=con_FURL_help/VAT)

Regards
Nik

This entire VAT things is going to be a right pain for us, as no decision has yet been made on how our revenues may be recalculated, or how premium / non geo numbers will be dealt with. For example, at the moment we can advertise a 50p per call premium number that includes VAT. This is a price band that we have set for the number range that we wish to retail at. However this also includes VAT, which at 15% would be a 48.94p per call number! If any premium number supplier has to pass on vat reductions, then all publicity material needs to be updated, and these funny numbers do not have the same ring to them. The alternative is to keep the price the same and the outpayments increase slightly due to less VAT being taken off. The worst case, possibly the most likely is that BT and other large Telcos refuse to increase outpayments slightly, and still charge their customers the same, so both the customers and service providers get ripped-off with just the large telcos in between keeping the difference.

I understand what you are saying Mikael, but after listening to various discussions on radio 4, several people have mentioned the likelihood of prices quotes as "VAT inclusive" remaining unchanged ( with the greedy operators getting themselves a little extra margin ).        ???

So it may pay to wait and see what happens next week.        ;)