VAT on telephones


A

Adam

My company, which is VAT registered, recently bought a phone directly from
BT. They sent us a VAT invoice which showed that the VAT rate on the phone
was zero. They only charged us a small amount of VAT on the postage and
packing.

We phoned BT, who acknowledged that it was probably an error, and promised
to send a replacement VAT invoice. The replacement invoice was identical to
the first.

After more phone calls to BT which by and large failed to reach anyone who
understood what VAT was, I contacted the VAT enquiries people. Their
response seemed extraordinary: they told me that it was up to BT to
determine whether VAT was chargeable on the phone. I didn't realise that
charging VAT on goods was optional.

I don't know whether BT are selling phones without charging VAT, in which
case they are cheating the taxpayer out of vast sums of money, or simply
charging the VAT and not writing it on their invoice, in which case they are
cheating me out of a few quid (not sure which makes me more grumpy, to be
honest). Either way, this seems to be something that a big public company
like that really shouldn't be doing. What I find really astonishing,
however, is that HMRC really doesn't seem to care about this.

Does anyone else find this surprising?

Adam
 
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M

Miss L. Toe

Adam said:
My company, which is VAT registered, recently bought a phone directly from
BT. They sent us a VAT invoice which showed that the VAT rate on the phone
was zero. They only charged us a small amount of VAT on the postage and
packing.

We phoned BT, who acknowledged that it was probably an error, and promised
to send a replacement VAT invoice. The replacement invoice was identical to
the first.

After more phone calls to BT which by and large failed to reach anyone who
understood what VAT was, I contacted the VAT enquiries people. Their
response seemed extraordinary: they told me that it was up to BT to
determine whether VAT was chargeable on the phone. I didn't realise that
charging VAT on goods was optional.

I don't know whether BT are selling phones without charging VAT, in which
case they are cheating the taxpayer out of vast sums of money, or simply
charging the VAT and not writing it on their invoice, in which case they are
cheating me out of a few quid (not sure which makes me more grumpy, to be
honest). Either way, this seems to be something that a big public company
like that really shouldn't be doing. What I find really astonishing,
however, is that HMRC really doesn't seem to care about this.

Does anyone else find this surprising?

Adam
Try writing a letter to the cheif exec of BT saying you are bringing a
private prosecution for VAT Fraud.

That should get some some of response :)
 
C

Colin Forrester

Adam said:
My company, which is VAT registered, recently bought a phone directly from
BT. They sent us a VAT invoice which showed that the VAT rate on the phone
was zero. They only charged us a small amount of VAT on the postage and
packing.

We phoned BT, who acknowledged that it was probably an error, and promised
to send a replacement VAT invoice. The replacement invoice was identical to
the first.

After more phone calls to BT which by and large failed to reach anyone who
understood what VAT was, I contacted the VAT enquiries people. Their
response seemed extraordinary: they told me that it was up to BT to
determine whether VAT was chargeable on the phone. I didn't realise that
charging VAT on goods was optional.

I don't know whether BT are selling phones without charging VAT, in which
case they are cheating the taxpayer out of vast sums of money, or simply
charging the VAT and not writing it on their invoice, in which case they are
cheating me out of a few quid (not sure which makes me more grumpy, to be
honest). Either way, this seems to be something that a big public company
like that really shouldn't be doing. What I find really astonishing,
however, is that HMRC really doesn't seem to care about this.

Does anyone else find this surprising?
Not entirely - was the invoice in the name of your company or a person?

They have recently started issuing invoices on our BT Openzone account
which state "this is not a VAT invoice" even though the VAT is shown. I
queried this and was told this was because it was showing my name at the
top and not my company name.

Still don't quite understand it.
 
M

Mike Scott

Adam said:
My company, which is VAT registered, recently bought a phone directly from
BT. They sent us a VAT invoice which showed that the VAT rate on the phone
was zero. They only charged us a small amount of VAT on the postage and
packing.
That last bit is the puzzler for me - postage takes the VAT rate of the
posted items AIUI, so if you post zero-rated items, the post is
zero-rated too. Or has that changed lately?
 
A

Adam

Colin Forrester said:
Not entirely - was the invoice in the name of your company or a person?

They have recently started issuing invoices on our BT Openzone account
which state "this is not a VAT invoice" even though the VAT is shown. I
queried this and was told this was because it was showing my name at the
top and not my company name.

Still don't quite understand it.
The receipt has both my name and the company name on it. But I don't see how
that could make the slightest bit of difference. I don't think there is any
reason why private individuals can't register for VAT if, for example, they
run a business on a self-employed basis.

But it doesn't really explain why they can still show the VAT on the
postage.

Adam
 
A

Adam

Mike Scott said:
That last bit is the puzzler for me - postage takes the VAT rate of the
posted items AIUI, so if you post zero-rated items, the post is zero-rated
too. Or has that changed lately?

--
Yes, I think you're right. I've just looked at some of my Amazon invoices:
when they send VATable goods, they charge VAT on the postage, and when they
send books (zero rated), they don't charge VAT on the postage. Good point:
I'll point that out to HMRC and see if that makes them more interested.

Adam
 
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A

Adam

Miss L. Toe said:
Try writing a letter to the cheif exec of BT saying you are bringing a
private prosecution for VAT Fraud.

That should get some some of response :)
Hm, could be worth a try, but I suspect he'd pretty quickly figure out I was
bluffing.

Mind you, the principle isn't a bad one. Perhaps I should write out to their
finance director explaining the situation and that I am currently in
correspondence with HMRC telling them why I believe BT is guilty of VAT
fraud.

Many thanks

Adam
 
T

tinnews

Colin Forrester said:
Not entirely - was the invoice in the name of your company or a person?

They have recently started issuing invoices on our BT Openzone account
which state "this is not a VAT invoice" even though the VAT is shown. I
queried this and was told this was because it was showing my name at the
top and not my company name.
I don't see the relevance of that, you could just as easily be VAT
registered as a company. VAT registration isn't limited to companies.
 
T

tinnews

Adam said:
The receipt has both my name and the company name on it. But I don't see how
that could make the slightest bit of difference. I don't think there is any
reason why private individuals can't register for VAT if, for example, they
run a business on a self-employed basis.

But it doesn't really explain why they can still show the VAT on the
postage.
They [should] add VAT to the cost of the whole transaction so it's
quite OK to add VAT to the 'carriage' element.
 
C

Colin Forrester

I don't see the relevance of that, you could just as easily be VAT
registered as a company. VAT registration isn't limited to companies.
I fully appreciate that - but they have since moved the name to another
field and I got an emailed invoice without the "this is not a VAT
invoice" on it.

Perhaps somewhere deep down where they know/think they don't need to
issue VAT invoices (the public) they can save themselves a few quid with
rounding differences - or something.
 
M

Mike Scott

But it doesn't really explain why they can still show the VAT on the
postage.
They [should] add VAT to the cost of the whole transaction so it's
quite OK to add VAT to the 'carriage' element.
The VAT rate ought to be the same for the postage as for the posted
item, so it's VAT on both or neither.
 
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T

tinnews

Mike Scott said:
But it doesn't really explain why they can still show the VAT on the
postage.
They [should] add VAT to the cost of the whole transaction so it's
quite OK to add VAT to the 'carriage' element.
The VAT rate ought to be the same for the postage as for the posted
item, so it's VAT on both or neither.
There's VAT on both, it just happens to be 0% in some cases (e.g.
books). 'No VAT' is not the same as '0% VAT'.
 
M

Mike Scott

Mike Scott said:
But it doesn't really explain why they can still show the VAT on the
postage.

They [should] add VAT to the cost of the whole transaction so it's
quite OK to add VAT to the 'carriage' element.
The VAT rate ought to be the same for the postage as for the posted
item, so it's VAT on both or neither.
There's VAT on both, it just happens to be 0% in some cases (e.g.
books). 'No VAT' is not the same as '0% VAT'.
Pedantic. I think people know what was intended in relation to the
original posting.
 
A

Adam

There's VAT on both, it just happens to be 0% in some cases (e.g.
books). 'No VAT' is not the same as '0% VAT'.
Well, this receipt shows a VAT rate of 0% for the telephone, which I
acknowledge is not quite the same thing as saying no VAT. Either way,
though, I seriously doubt that it can be legal.

Adam
 
M

me

Adam said:
Yes, I think you're right. I've just looked at some of my Amazon invoices:
when they send VATable goods, they charge VAT on the postage, and when they
send books (zero rated), they don't charge VAT on the postage. Good point:
I'll point that out to HMRC and see if that makes them more interested.
Maybe you paid for the telephone instruction book and the phone was an
accompanying free gift.
 
A

Adam

Maybe you paid for the telephone instruction book and the phone was an
accompanying free gift.

--
I guess they could always try arguing that with the VAT man, but if there
were any legal basis for it then I think it's extremely unlikely that
anything that comes with an instruction book would have any VAT on it.
 
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P

peter

Adam said:
I guess they could always try arguing that with the VAT man, but if there
were any legal basis for it then I think it's extremely unlikely that
anything that comes with an instruction book would have any VAT on it.
Yes, this is the case for computer books that include a CD, there's a
small amount of VAT payable on the CD part, even when it's advertised
as a 'free CD'.
 

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