New 15% VAT rate on mobile phones and tariffs
The UK’s mobile phone networks have reduced their monthly line rentals with the new VAT saving passed on to all customers new and old. As you may or may not know the VAT has been reduced from 17.5% to 15%, this equates to an actual saving of 2.13%.
Whilst the changes have taken place, we are waiting for all the retailers to update their data so over the next few days you might notice some discrepancies. Some retailers and network sites will not update their online prices but the the important thing is that the new lower prices will apply when you receive your bill from the network. These changes will be in place until the VAT rate changes again, the next review is due in Jan 2010.
As an example, Racoon £35 will now cost £34.26. Orange have also reduced the cost of all handsets and modems they have rounded all the prices down to the nearest 50p.
T-Mobile have reduced all their monthly rentals for new and existing customers, however these changes will not be shown on the website for the time being. Pay As You Go customers will also benefit from the changes. Pay As You Go customers will receive extra credit depending on the amount they top up.
Vodafone have also passed on the VAT saving to all new and existing customers and line rental will be reduced by 2.13%. Pay As You Go customers will also receive an extra 2.5% extra credit when they top up, this is actually more than the effective VAT saving.
3 Mobile are passing the VAT cut on all their products and services. The updated prices will not be shown on the website for the time being but you will pay the new lower price. As an example if the advertised price is £129.99, you only pay £127.22 and if a pay monthly tariff is advertised at £21.00 a month you will only be charged £20.55. Pay As You Go customers will also receive extra credit depending on how much they top up. For example if you top up by £10.00 you will receive £10.18 of credit.
O2 have passed on the reduction to all new and existing customers however the new prices may not be displayed on all web sites immediately.
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