Phone giants overcharging VAT

If you have seen your monthly phone bill go up sooner than expected after the VAT rise to 20% as of January 4, you may have been over charged and you may even be able to get a refund.  According to a report from the price comparison website uSwitch, some phone companies, including Orange, T-Mobile, Virgin Media and Three charged their customers at the 20% rate a month before the increase went into effect.  Ernest Doku of uSwitch said the reason is basically that the companies didn’t want the extra bother of changing rates in the middle of a billing cycle.

The phone companies haven’t broken the law, though some will argue the point.  HM Revenue and Customs say that billing at 20% is OK as long as the bills went out on or after January 4.  Most companies bill in advance for fixed packages, so the customers most affected were those who went over their monthly free allowance of calls, texts, etc.

The additional tax will affect all the phone companies, of course, but some seem to be handling their new billing with less pain to customers.  Homephonechoices, another price comparison site, suggested that consumers should be sure to shop around and change providers if they are not getting the best deal for their particular needs and choices.  Though most of the big companies have increased other costs also, such as call connection fees and both U.K. and international calling rates, there are substantial differences.