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UK Broadband ISPs Introduce VAT Changes

Posted: 01st Dec, 2008 By: MarkJ
Today marks the start of a major national reduction in the rate of UK Value Added Tax (VAT), moving from the original rate of 17.5% to 15% now. Naturally many UK ISPs are also adjusting their products and services to match, though a change of 2.5% will only translate to a few pennies of savings for most broadband consumers.

However not all providers are planning to pass the savings on, some will absorb it and maintain their existing levels, others will offer extra services and a few probably won’t do anything. Here's a rough summary of what we know about the largest ten ISPs:

1. BT (PlusNet, Brightview)

BT/PlusNet says its prices will be reduced in line with the change in VAT.

2. Virgin Media

Virgin Media expects to do something similar to BT, although it was slightly less specific.

3. Carphone Warehouse (TalkTalk, AOL)

Carphone intends to improve its broadband services and maintain current levels of pricing, though most voice services will be reduced.

4. Sky Broadband (BSkyB)

Sky recently adjusted its bundled broadband pricing and adopts some extremely simple levels (£5, £10 etc.). Consequently it is currently maintaining existing levels and may put the cash into its services, though we're seeking clarification.

5. Tiscali (Pipex, Nildram etc.)

Tiscali will pass the VAT reduction on, though their website may not reflect this immediately; it will show on bills though.

6. Orange (France Telecom)

Orange plans to pass the VAT reduction on, although any changes are expected to be delayed by a few days due to the simplicity of their pricing levels (e.g. £5, £10 etc.).

7. O2 (Be Unlimited)

O2 will pass the VAT reduction on, though there may be a slight administrative delay in reflecting this publicly. Be Broadband is going a step further by reducing all of its package prices by 50p each. This often works out as an even greater reduction than 2.5%.

8. Kingston Comms (KCOM)

Kingston, including its ISPs (Karoo, Eclipse), will pass the savings on.

9. THUS Group / C&W (Demon)

Unknown, though Demo Internet prices currently remain unchanged.

10. Entanet

Most of Entanet's broadband services are offered via vISPs and as a result there could be some variability on how any changes are reflected. So far their vISPs appear to be passing the reduction on.

--

Readers should take note that the VAT change is somewhat of a double edged sword in that while it can make services cheaper, it is also an administrative nightmare for some to implement. As a result the changes may take a few days/weeks for ISPs to reflect.

Likewise the move is only temporary, with VAT expected to return to its precious level after 13 months. We shall not be updating our huge list of ISPs just yet, thus allowing all providers a month or two to reflect any changes.
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