VAT on Cancelled contracts

Ace2007

Hi All,

Just looking for a bit of advice, I received a bill today for a contract which has been cancelled by the provider - they claim I'm liable for the remaining months of my contract.

The bill for example says €200 including VAT, my question is, as they are not providing a service should VAT be excluded from the final bill?

From the Revenue website I found:

"3.2. A charge levied by a supplier when a customer makes a cancellation (“cancellation charge”) and a supply does not take place, is to be treated as falling outside the scope of VAT by virtue of it being regarded as compensation and not a payment in respect of a taxable supply."


When I mentioned this to customer care, they would not budge and said that VAT is included as per my contract.

If it is included as per my contract, but Revenue do not see it that way, what is the provided doing with the VAT they collect?

foggy_lad

No they are not allowed to charge VAT for a service they are not providing.

davo10

Ace2007 wrote: »

Hi All,

Just looking for a bit of advice, I received a bill today for a contract which has been cancelled by the provider - they claim I'm liable for the remaining months of my contract.



From the Revenue website I found:

"3.2. A charge levied by a supplier when a customer makes a cancellation (“cancellation charge”) and a supply does not take place, is to

Is this going to be one of those threads where the OP asks for the advice he wants to hear based on giving only small part of the overall picture?

OP, the revenue info you have relates to a situation whereby the consumer cancels the service. In your post you say the provider cancelled the service, is this because you stopped making payments and the service provider wants to be paid in full as per the contract?

kippy

Theres a long thread in the eircom forum on this issue. Well worth a browse. No outcome either btw.....

Ace2007

davo10 wrote: »

Is this going to be one of those threads where the OP asks for the advice he wants to hear based on giving only small part of the overall picture?

OP, the revenue info you have relates to a situation whereby the consumer cancels the service. In your post you say the provider cancelled the service, is this because you stopped making payments and the service provider wants to be paid in full as per the contract?

The provider cancelled the service without contacting me, they refuse point blank to discuss the issue with me - a complaint has been outstanding with them for 6 weeks, I have on numerous occasions stated to them that I have no problem paying if they provide me with an explanation in full and in writing as to why they cancelled it - 6 weeks later I have not received this.

Now today they sent me a bill and it includes VAT - this is my issue.
Surely whether I cancel the contract or they cancel it the service is been removed and hence VAT cannot be applied?

kippy

http://touch.boards.ie/thread/2056714810/1
2 years old, over 150 posts and no resolution......

davo10

Ace2007 wrote: »

The provider cancelled the service without contacting me, they refuse point blank to discuss the issue with me - a complaint has been outstanding with them for 6 weeks, I have on numerous occasions stated to them that I have no problem paying if ......

Surely whether I cancel the contract or they cancel it the service is been removed and hence VAT cannot be applied?

Pretty simple questions:

•Were you under contract when service was cancelled?
•were you paying your bill in full and on time?
• Did you read the T&CS?

itsirishfarmer

is it eircom

Ace2007

davo10 wrote: »

Pretty simple questions:

•Were you under contract when service was cancelled?
•were you paying your bill in full and on time?
• Did you read the T&CS?

Yes 3 points.

1.My DD date on my contract is 29th of the month. They claim my DD date is 15th. but that because of the new banking codes (I don't understand it), they applied for my DD on the 3rd of January and it failed. (I'm not disputing this - I would have no reason to believe an amount was going to come out of this date). I do dispute the dates though.

I never look at my invoices but have since and noticed all where taken out on the 15th of the month. - Still different than my contract.

2. My contract states the following "..., contact you directly by SMS and phone in relation to overdue payments and to fix a credit limit on your account and to discontinue services without notice if the limit is exceeded"

They never contacted my by phone - This is another issue - a simple call to say your account is overdue and will be cancelled if you do not pay - I would have paid with a card on the spot.

3. My contract may be suspended or termination:

Where meteor reasonable believes that you are unable to comply with the payment obligations.

- if, having made reasonable efforts we cannot contact you

They didn't contact me, and I've paid over 1500 over the course of the contract on time every month.

Now getting back to the original question, can the charge VAT to the bill?
Are they giving this money to the government of just pocketing it, if the service is not being provided?

itsirishfarmer wrote: »

is it eircom

No, but a related company (I think)

Five Lamps

Ace2007 wrote: »

Yes 3 points.

1.My DD date on my contract is 29th of the month. They claim my DD date is 15th. but that because of the new banking codes (I don't understand it), they applied for my DD on the 3rd of January and it failed. (I'm not disputing this - I would have no reason to believe an amount was going to come out of this date). I do dispute the dates though.

I never look at my invoices but have since and noticed all where taken out on the 15th of the month. - Still different than my contract.

Almost every service provider is moving their payment date from the end to mid-month. It's important to note that it is not a change to the T&C's. You should check your other bills they may be making similar changes.

2. My contract states the following "..., contact you directly by SMS and phone in relation to overdue payments and to fix a credit limit on your account and to discontinue services without notice if the limit is exceeded"

They never contacted my by phone - This is another issue - a simple call to say your account is overdue and will be cancelled if you do not pay - I would have paid with a card on the spot.

3. My contract may be suspended or termination:



They didn't contact me, and I've paid over 1500 over the course of the contract on time every month.

Now getting back to the original question, can the charge VAT to the bill?
Are they giving this money to the government of just pocketing it, if the service is not being provided?



No, but a related company (I think)

You did say that you had complained over 6 weeks so I suspect that the company would have advised you what would happen next.

Ace2007

Five Lamps wrote: »

Almost every service provider is moving their payment date from the end to mid-month. It's important to note that it is not a change to the T&C's. You should check your other bills they may be making similar changes.



You did say that you had complained over 6 weeks so I suspect that the company would have advised you what would happen next.

I wasn't actually aware that companies where moving their payment dates, thanks for letting me know, (bit late). Would they not be required to let people know, or if in this instance, take this into account instead of instantly cancelling the contract? Could have even suspended the account but no.

The company haven't responded to my complaint at all, Customer care tell me that it is being looked into and that's all I get. I have for the record gone to comreg, they have advised me that the company in question must provide an official response regarding the complaint. As of yet they haven't.

I find out today that I cannot change provides as my phone is locked to the network. So I'm in a situation that unless I pay up I can't leave them, even though they have given my no written explanation as to the reasons it's being cancelled.

I'm being in no way unreasonable and I've stated time and time again to customer care I will pay the invoices if receive a response to my complaint (assuming that it is in line with my contract, which I assume it won't be - hence they aren't replying)

FWIW the bill in question was for €46.

Fred Swanson

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