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VAT Change: Update

VAT Change: Update

VAT Change: Update

VAT changes for broadband and home phoneFrom Monday 1st December 2008 the VAT rate will drop from 17.5% to 15%. We're pleased to confirm that we will pass on the benefits to our customers. Subscription charges made on or after 1st December will have VAT charged at 15%. This applies to new and existing customers. We've put together a FAQ to answer some of the questions we're being asked. What are Plusnet doing about the VAT changes? We'll be passing on the reduction in VAT to our customers in their regular monthly subscriptions. Some ‘one-off' charges such as postage and packing on hardware won't be changed.   How will this affect me? If you are a residential customer you will see a modest reduction in your monthly subscription fees. For business customers where prices are quoted excluding VAT, the price will remain the same, but the amount of VAT paid will be 2.5% lower. What about referrals? Referrals for residential customers will remain as they are - we're not making any changes for referral credits. In other words we're not reducing the amount we give you back in referral value for residential products in line with the VAT changes. However, for business referrals where pricing is excluding VAT, the paid out value will be slightly less after VAT is calculated. Does this affect Broadband and Home Phone/Talk? Yes, this will lower the monthly cost all of our residential subscription services including Home Phone. What about Home Phone top ups? We're not making any changes to the way that you can top up your Home Phone account, but whatever you top it up by, will go a little bit further! What about domain pricing? As we quote domain pricing on our website as excluding VAT, the quoted price will remain the same, but the amount of VAT payable will be reduced. What if I'm on a product that you don't sell any more? Our old products (no longer for sale) will also have their subscription costs reduced accordingly. For example, Broadband Premier will be charged at £21.52 instead of £21.99. Isn't this a change to my Terms and Conditions? It's not a change to your terms and conditions as the price has not increased. We're only required to give our customer notice of a change to their terms and conditions if there is a "detrimental change", such as a price increase. Can you give me more detail about what I will pay? Won't the prices be a little odd? If, for example, your broadband subscription is currently £9.99 and is paid on the 23rd of every month you'll pay less, £9.75 to be precise, on 23rd December. Keen mathematicians amongst you will have noticed we've rounded-down the reduced cost by a further 3p to make a ‘manageable' price point. We'd find it difficult and clumsy to have products at a price point of £9.78 for example. Over the year that represents a total saving of £2.88. If you have a question not covered here please do ask and we'll be happy to look into it for you.

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15 Comments
Rising Star
Quick question, lowering price keeps people in contract, but when VAT goes back up to 17.5% its a change on contract which is a price increase letting people skip out of their contract obligations?
Technically, the price has not "decreased", although due to keeping to sensible price points it has. When the VAT rate returns to its old level, we may the prices effectively go up, but maybe to £9.95 rather than £9.99 based on the current NET figure.
Plusnet Staff
@dgwebb I don’t expect that VAT going back up would constitute a detrimental change to terms. We’ve passed on the reduction directly and we have no plans to increase the material cost, other than to pass on the corresponding VAT increase at the end of 2009.
I am with plusnet for the last 9 months now, I never had any single problem with them. In fact I have recommended to several of my friends but they are bit waivery. I too had lot of probelms with other providers. I will recommend plusnet one hundred percent to anyone. Even if Plusnet had not reduced the VAT. I would not have bothered. Thank you Plusnet
Last year at this time I was given a reduction from £14.99 to £9.99 per month as reward for staying with free on line.Is that no longer the case. Regards Ken.
i pay £14.99 not £9.99 for braodband why the differance? C BARNES
Community Gaffer
@Clive Barnes We have a number of different packages ranging in price, you can see the different products we have available here: http://www.plus.net/residential/?home=resindextop
N/A
[...] 4, Billing, Besides the normal calls to update card and submit new Direct Debits, there’s been a handful of accounts which haven’t been billed on the normal billing date, because we’ve had to be sure the VAT changes we’ve introduced don’t impact the Billing databases. Fortunately, there’s been no major problems, and the reduced rates on all broadband packaged are now being passed on. Further information on this is available. [...]
While I welcome and applaud any reduction in my monthly bills any talk of "sensible" price points is absurd while the entire country clings to it's ridiculous .99 obsession. A sensible price point would be the full £15, not £14.99 etc. I mean, c'mon - who does the retail world think they're tricking into buying a product just because it says £14 at the beginning rather than 15Huh Any idiot knows it's still costing them £15 for their purchase! Maybe not technically, but as good as. Anyhoo, non-specific rant over. Keep up the good work, guys! Smiley
Community Gaffer
@Ken Ayton That was a specific offer we were running for a while last year, IIRC it was £5 off for 6 months if you stayed for 12 months. We may look into doing something similar and we'll let you know any more information as we have it.
I note that the charge of £9.99 used in your web example is reduced by lower vat to £9.78p and then (generously) rounded down to £9.75. I pay £14.99 (before referrals which remain the same) that reduces to £14.67p on the lower 15% vat rate. Considering I pay more, how come that isn't also generously rounded down to £14.65 pence ? Or have I missed something ?
I pay £16.04 for your Talk Service ref my bill no 16377197, invoice No 13944215,account No 3184027, while in your bill "SAVE MONEY WITH MADASAFISH TALK" offers line rental for just £9.99. I shall be grateful if you can explain why the difference. Thanks I was also offered £9.99 when I joined, but now I pay £15.31 for broadband. Why the increase.
@Ken Bagnall, You have missed something - check https://portal.plus.net/my.html?s=0&action=account_summary where you will see that your cost is now £14.65 (or at least mine is).
@Geoffrey Swindale Yours may be however ...That's where I got my £14.67 from !
Vat up or Vat down will not make any difference to me having just changed to Plus Net, I know how good they are and will not be in a hurry to change again.