Letter from Sky about VAT increase

Tarabuses

I received this letter today although it is dated 15th November.

Due to the UK VAT rate reverting to 17.5% from 1st January 2010 there will be an increase in our subscriptions. The letter sets out the additional amounts payable based on the packages being taken.

It then says that the increase will be applied to subscriptions payable on 28th December 2009. I don't understand this as I thought VAT was charged at the rate applicable on the date an incvoice is issued. On that basis the VAT increase should not be applied until 28th January 2010.

Can anyone remember when they applied the reduced VAT rate (which was effective from 1st December 2008)?

zoltar_boi

Tarabuses,

Give them a ring - they are quoting a change to VAT rate which is applicable in the UK only. You are not subject to this outrageously low rat of VAT!:D

Z

They dropped the prices at the start of the year in line with the UK VAT decrease so it was expected that they would go up again.

Joey the lips

Got that letter last month....

John mac

thread about it here

Tarabuses

John mac wrote: »

thread about it here

I had already posted on that thread but it is not the same issue.

I have now checked and my Sky payments only reduced in January 2009 despite the VAT reduction being effective from 1 December 2008. Now they want to increase from my December payment even though the increase isn't effective until 1 January. Talk about having your cake and eating it!

Bebop

surely VAT is charged at the Irish Rate?
AFAIK;
Goods and services supplied and delivered in Ireland are liable to VAT at Irish rates which is paid to the Irish revenue commissioners, vendors do not have the option of charging UK VAT for payment to the UK goverment even if these services are delivered from the UK..

If VAT was levied at point of origin Sky could base itself in a low tax country, so would Ryanair

Liam Byrne

Bebop wrote: »

surely VAT is charged at the Irish Rate?
AFAIK;
Goods and services supplied and delivered in Ireland are liable to VAT at Irish rates which is paid to the Irish revenue commissioners, vendors do not have the option of charging UK VAT for payment to the UK goverment even if these services are delivered from the UK..

If VAT was levied at point of origin Sky could base itself in a low tax country, so would Ryanair

You pay VAT wherever the company is based.

"Sky Ireland" doesn't really exist / is a marketing misnomer; you're paying a UK company.

testicle

Bebop wrote: »

surely VAT is charged at the Irish Rate?
AFAIK;
Goods and services supplied and delivered in Ireland are liable to VAT at Irish rates which is paid to the Irish revenue commissioners, vendors do not have the option of charging UK VAT for payment to the UK goverment even if these services are delivered from the UK..

If VAT was levied at point of origin Sky could base itself in a low tax country, so would Ryanair

The Services are not being supplied from Ireland, just delivered to ?

Bebop

missing the point guys..VAT is levied at point of delivery, not point of origin, try buying a car from the UK and importing it here..the VAT you paid in the UK counts for nothing

testicle

Bebop wrote: »

missing the point guys..VAT is levied at point of delivery, not point of origin, try buying a car from the UK and importing it here..the VAT you paid in the UK counts for nothing

Cars are a different case. You can claim the UK VAT back if the car is new.

Tarabuses

Bebop wrote: »

missing the point guys..VAT is levied at point of delivery, not point of origin, try buying a car from the UK and importing it here..the VAT you paid in the UK counts for nothing

What you are paying on the car is VRT. Sky TV is a service and most services are charged in the place of supply unless the recipient is registered for VAT. However, Sky TV does not have an establishment in Ireland. The contract is issued from the UK.

Bazzy

Yes but if i buy something in tesco (uk company) they cant hike up the vat because the UK is seems a bit dodgy to me

Also vat in the uk is 17.5% and is 21% here do sky only charge 17.5% normally

manutd

When the UK VAT rate went down our did to, and now its going up as the UK Vat rate is going back up. It not rocket science.

GerardKeating

Bebop wrote: »

If VAT was levied at point of origin Sky could base itself in a low tax country, so would Ryanair

Sky are based in the UK, so UK vat is charged.

No VAT on flights...

Bebop

Tarabuses wrote: »

What you are paying on the car is VRT. Sky TV is a service and most services are charged in the place of supply unless the recipient is registered for VAT. However, Sky TV does not have an establishment in Ireland. The contract is issued from the UK.

Goods and services are treated the same under VAT law, different rates may apply to services

everybody pays VAT, traders can register in order to claim back some of the VAT they themselves have paid,

Sky Ireland is registered in Ireland as a company, they are also registered for VAT

Because it is a Paddy tax, VRT on imported cars is quite a different matter,

I was referring to the VAT element which is also payable at point of import, you are charged VAT at the Irish rate but you are entitled to claim back the UK VAT, this is how all VAT works, its just that with small items it is seldom worth while to do this especially if the local VAT rate is higher

cgarvey

A lot of confusion about VAT here.

Normally (as in most goods and services) you pay VAT at the seller's country's rate, if you and the seller are both within the EU. Broadcasting is a slightly different story. You can read about it on revenue.ie if you're interested. So, basically Sky UK provide the service, and EU VAT regulation dictate that VAT is charged at the UK rate, not the Irish one. Again, this is the exception, rather than the norm.

As for the OP, what VAT you charge (or, rather, when you charge it) can vary depending on your accounting practice. That would explain why an inoice on Dec 28th has VAT charged at Jan '10 rates. It would not explain why it didn't happen when the rate went down. Maybe Sky didn't have enough time to alter their systems? Maybe Sky changed accounting practices in the meantime? Either way, the only gain they stand to make, is the interest on the VAT they've collected before having to declare their returns. Maybe that's enough cash to consider doing it, I don't know.

So Sky UK provide the subscription service and correct charge UK VAT rate (regardless of the EU country of the buyer). Sky Ireland only provide advertising and installation services (and Irish rates apply there).

Tarabuses

manutd wrote: »

When the UK VAT rate went down our did to, and now its going up as the UK Vat rate is going back up. It not rocket science.

Not quite correct as the point I was originally making is that UK VAT will have been at 15% for 13 months (1st December 2008 to 31 December 2009) but we will only have paid the reduced subscription for 11 months (January to November 2009).

The question of whether we should pay UK or Irish VAT has been discussed before and clarified again by cgarvey. Don't you think that the Irish Revenue would have pulled them up long ago if it was incorrect? They are losing millions in tax but that is the way Sky is structured.

eirman

Amazon prices include UK VAT. If you buy from the ROI they charge the difference (6.5%) as an additional charge.

Tarabuses

eirman wrote: »

Amazon prices include UK VAT. If you buy from the ROI they charge the difference (6.5%) as an additional charge.

I've never seen that as I only buy books from Amazon (zero VAT).