broadband news

Broadband provider denies customers 2.5 per cent VAT saving

UK Online, a popular broadband provider, is refusing to share the benefits of the recent 2.5% VAT with its customers.

It has informed approximately 30,000 broadband customers, via email, that the company plans to hold on to the savings - following the reduction of VAT from 17.5% to 15% on December 1st 2008 - and avoid administrative costs.

UK Online told broadband customers: “Passing on the VAT reduction would create a lot of administrative work, overhauling customer billing processes, and amending direct debits and payment instructions. We've taken the decision to leave subscriptions at the current rate.”

The move is in sharp contrast to the Christmas spirit of many other broadband providers, including Be Broadband and Plusnet Broadband, who last week announced they were passing on VAT savings to their broadband customers.

A member of the Treasury select committee said, however, that the company's claim to be helping the broadband customer was laughable.

Speaking to the Guardian, Mark Todd, the Labour MP for Derbyshire South, said: “What they don't say, of course, is that the company will trouser the difference.”

A Treasury spokesman told the Guardian the company's stance would not encourage broadband consumers to spend. “Passing on cuts through lower prices will stimulate consumer spending and means that both consumers and businesses benefit from the change.”

UK Online, ironically, received a highly commended accolade for its broadband service earlier this year in the National Customer Service Awards held in London.

08/12/2008
Author: CompareBroadbandUK staff writer

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