broadband news

VAT cuts passed on to broadband subscribers

Two broadband providers (ISPs) are leading the way by passing the recent VAT reductions on to their subscribers. Broadband providers BT and Plusnet are both set to implement the reduction from 1st December 2008.

VAT has been reduced by the Government from 17% to 15%, and is expected to be a temporary measure to encourage spending within the economy. Although the reduction for broadband subscribers will be fairly small - approximately 50p on a £20 a month contract - the savings for broadband customers will no doubt be appreciated during the recession.

Broadband customers who have already subscribed to BT and Plusnet, and paid in advance of 1st December, will still benefit from the VAT change.

Michael Phillips, product director of Broadband Choices.co.uk, has welcomed the decision by the two ISPs and called for others to follow.

As quoted on webuser.co.uk, he said: "Whilst the saving will not be substantial, they have taken a fair stance and if other telecom/utility providers also pass on the VAT cut those small savings will add up over the year."

Phillips added that ISPs which do not pass on the VAT cut to broadband customers should use the extra income to invest in delivering improved broadband.

"For example, giving customers a more generous usage cap, connection speeds that match the advertised speed level and a general improvement in customer services would all be worthwhile investments for any broadband provider," Phillips said.

28/11/2008
Author: CompareBroadbandUK staff writer

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