Have just had to ring sky about my pixellating picture and they did a system reboot which may have cleared it but whilst listening to the options it said that as VAT is going to 17.5% in January and we pay in advance payments made in December will be increased. This is wrong. If you pay in advance and the payment is less that £200k then you pay the VAT rate that is in force AT THE TIME OF PAYMENT. Is not a lot of money but sky's accountants will probably only give the 15% over and stand to make a lot of money unless people complain.
Sky ripping us off?
- Thread starter shep1968
- Start date
I don't have Sky, but it may be worth checking on your bills what happened last December, a month before VAT was reduced to 15% - on that occasion did they give you a reduction a month early? If not, then they're clearly extracting the urine on this occasion.
In the month before the new rate came into place they should have charged 17.5% as that was the rate at the time of paying. I'm not sure how i can check my bill, can you do it online? As it is a small amount most will not ring and complain as the phone call cost will be too much.
Big Aura
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- Oct 13, 2008
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I think you pay in arrears, so the December payment is an early payment in respect of goods/services to be rendered in January. It's not the timing of the payment, but the date that the contract is performed which is relevant.
I recall LoveFilm refunded me 8p in the month following the VAT reduction.
I recall LoveFilm refunded me 8p in the month following the VAT reduction.
In that case we pay in advance not arrears. I'm afraid you are wrong. For an amount like this it is the date of payment that creates the taxpoint, not when the goods are received. If you were to order and pay for a car in full now you would pay VAT at 15%, not 17.5%.
Big Aura
Well-known member
- Oct 13, 2008
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apols re mixed-up terminology on use of 'arrears', but the rest is actually correct.
If there's a VAT rate change during the period covered by an invoice for continuous supplies, you can declare VAT at the new rate on the part of the supply of goods or services you made after the rate change - even though the normal tax point happened earlier. For example, where a payment is received before the goods or services are supplied.
If you decide to do this then you should declare VAT at the old rate on the value of the goods supplied or services performed before the change in rate, and at the new rate in the value of goods supplied or services performed after the rate changed. If doing this reduces the amount of VAT due then you must issue a credit note to your customer.
If there's a VAT rate change during the period covered by an invoice for continuous supplies, you can declare VAT at the new rate on the part of the supply of goods or services you made after the rate change - even though the normal tax point happened earlier. For example, where a payment is received before the goods or services are supplied.
If you decide to do this then you should declare VAT at the old rate on the value of the goods supplied or services performed before the change in rate, and at the new rate in the value of goods supplied or services performed after the rate changed. If doing this reduces the amount of VAT due then you must issue a credit note to your customer.
shep1968:In that case we pay in advance not arrears. I'm afraid you are wrong. For an amount like this it is the date of payment that creates the taxpoint, not when the goods are received. If you were to order and pay for a car in full now you would pay VAT at 15%, not 17.5%.
I'm afraid that's not strictly correct. (with regards the car)
If you were to pay for a car now, the only way of securing the vat at 15% would be if you took delivery of the car now as well.
If you tried to pay now and take delivery of the car, say in Jan you would then be liable for the remainder 2.5% VAT.
I know it's not relevant as to this post, but thought it was worth mentioning and correcting that's all.
The vat rules are VERY complicated indeed and there are so many different ways of calculating what you will and won't pay from now and from 1st Jan 2010
The best way to know for sure and to answer any questions is to visit their website.
http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-changes.htm
I'm afraid that's not strictly correct. (with regards the car)
If you were to pay for a car now, the only way of securing the vat at 15% would be if you took delivery of the car now as well.
If you tried to pay now and take delivery of the car, say in Jan you would then be liable for the remainder 2.5% VAT.
I know it's not relevant as to this post, but thought it was worth mentioning and correcting that's all.
The vat rules are VERY complicated indeed and there are so many different ways of calculating what you will and won't pay from now and from 1st Jan 2010
The best way to know for sure and to answer any questions is to visit their website.
http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-changes.htm
smattyone:
shep1968:In that case we pay in advance not arrears. I'm afraid you are wrong. For an amount like this it is the date of payment that creates the taxpoint, not when the goods are received. If you were to order and pay for a car in full now you would pay VAT at 15%, not 17.5%.
I'm afraid that's not strictly correct. (with regards the car)
If you were to pay for a car now, the only way of securing the vat at 15% would be if you took delivery of the car now as well.
If you tried to pay now and take delivery of the car, say in Jan you would then be liable for the remainder 2.5% VAT.
Are you sure about that? If i were to buy, lets say, a TV from Argos online right now, with delivery next week, 3rd Jan, i would only pay 15%. What mechanism is in place for me to pay the extra 2.5%, who would check, etc.
shep1968:In that case we pay in advance not arrears. I'm afraid you are wrong. For an amount like this it is the date of payment that creates the taxpoint, not when the goods are received. If you were to order and pay for a car in full now you would pay VAT at 15%, not 17.5%.
I'm afraid that's not strictly correct. (with regards the car)
If you were to pay for a car now, the only way of securing the vat at 15% would be if you took delivery of the car now as well.
If you tried to pay now and take delivery of the car, say in Jan you would then be liable for the remainder 2.5% VAT.
Are you sure about that? If i were to buy, lets say, a TV from Argos online right now, with delivery next week, 3rd Jan, i would only pay 15%. What mechanism is in place for me to pay the extra 2.5%, who would check, etc.
It was clarified on TV last week. If you can get the supplier to invoice you before the end of the year you can take delivery in the New Year without paying the increase. It is down to the "tax point".
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