Operators deny VAT overcharge


Everything Everywhere and Virgin say charging customers 20 per cent levy for last months bills is in line with HMRC policy

Everything Everywhere and Virgin Media have rejected accusations they overcharged customers through an excess VAT charge.

The companies  added the new 20 per cent levy to monthly bills issued on January 4, when the new charges came into practice.

This meant that some mobile services used by customers that were outside certain bundles were charged at 20 per cent instead of 17.5 per cent because their billing period came after the VAT rise.

The operators said the charges are in line with HRM Customs and Revenue guidelines for providers of “continuous services”.

The operators said they did not profit from the charges.

A Virgin Media spokesperson said: “Like all companies supplying goods and services, Virgin Media has increased VAT on its products and services in line with the government’s VAT increase to 20 per cent.

“Whilst most services are billed in advance, for items that are billed in arrears, such as telephone calls, these items are charged at the prevailing VAT rate at the time of invoicing as per HMRC guidelines for continuous services.”

An Everything Everywhere spokesperson said: “Orange and T-Mobile send bills to its consumer contract customers at different points during the month dependent upon when they first joined.

“The recent change in VAT only affects the parts of the bill which are outside of the customer’s main tariff bundle, as the tariff bundle itself is paid in advance, and in this case at the lower rate of 17.5 per cent.

“Additional services, such as those calls and texts that are made outside of the bundle, are billed at the end of the monthly cycle (and in this case at the new VAT rate of 20 per cent).

“Only around 15 per cent of our consumer contract customer base actually go out of bundle, and use additional services.

“Whilst we don’t feel that many people will be out of pocket with this, for those who feel they are, they should get in contact with us and we’ll review their situation.

Three were also implicated in the VAT rise but were unable to comment.

O2 were able to split its bills to take account of the VAT rise.


  1. I hope 'Orange' don't ruin the interface with their own barnding software…. why can't they just leave the phones as they were produced!!!