VAT Cut - Eir, Virgin and Sky Refuse to Pass on - Contract Breach?

JTMan

The Irish Times report here that Eir and Sky are refusing to pass on the VAT reuction.

Spotify, Netflix, Aldi, Lidl, Vodafone and others have passed on.

Eir are refusing to do it. Sky say they will offer discounts in lieu. Virgin say they will delay hiking their prices in lieu.

This is effectively a price increase by Eir, Sky and Virgin.

Surely this should mean that customers can switch penalty free?

Comreg say:

ComReg said it welcomed plans by service providers to ensure that consumers benefit from the lower prices. But it said whether a customer has a contractual right to the benefit is dependent on the precise wording of the contract.

“Any customer who considers that they have not received a reduction to which they are entitled should complain to their service provider in the first instance, and can raise the issue with ComReg if they are not satisfied with their service provider’s response,” a spokesman said.

“ComReg will also be monitoring providers’ compliance with their regulatory obligations, including giving customers appropriate notice of any contract changes and of applicable cancellation rights,” he added.

Time to attempt to get out of contract penalty fee?

MOH

JTMan wrote: »

Virgin say they will delay hiking their prices in lieu.

Is it that time of year again?

Pretty scummy behaviour by all concerned. Not sure though it's enough to get out of contract is they're still charging you the same total per month.

Although if there was a VAT increase you can be sure they'd pass it on and say it was VAT so no get-out clause.

SeeMoreBut

You can be sure if it went the other way it be on as soon as it was announced

jimmycrackcorm

Once you get your next bill then something will have to show up wrong. Either the vat amount will be wrong or the or pre-vat price will change.

However, if your contact specifies that you pay x amount per month for the services and you still do, then I'm not sure there's a breach, just as much as if it went the other way and a service provider absorbed a vat increase.

Xterminator

Funny thing about contracts.

they have terms and conditions. If sky etc breach a t&c you can ask to leave contract without penalty. But you must show that they did break it.

Have you read you contract again and checked the wording? What specific clause do you say they will be breaking?

Sarn

You sign up to the contract based on the prevailing rate of VAT. If the VAT changes then that should be reflected in your bill. Following a reduction in VAT, if your monthly bill does not change, then the VAT exclusive price has increased.

Xterminator

Sarn wrote: »

You sign up to the contract based on the prevailing rate of VAT. If the VAT changes then that should be reflected in your bill. Following a reduction in VAT, if your monthly bill does not change, then the VAT exclusive price has increased.

you sign up to the contract as its written. It cannot be altered by verbal agreement, or assumptions etc.

If it is not in writing, then you have no basis in contract law to claim breach of contract.

watch judge judy for a day, and you will get the drift. if its not stated on the contact - then its not there. End of story.

Sarn

Just to point out that I’m not particularly bothered by this. It is just interesting.

Xterminator wrote: »

you sign up to the contract as its written. It cannot be altered by verbal agreement, or assumptions etc.

If it is not in writing, then you have no basis in contract law to claim breach of contract.

watch judge judy for a day, and you will get the drift. if its not stated on the contact - then its not there. End of story.

From Virgin Media’s T&Cs:

“6.1 You must pay all the Charges for which we bill you, together with any Value Added Tax and any other taxes (at applicable rates from time to time) which apply in relation to any Charges payable under this Agreement.”

“Unless stated otherwise, all prices quoted by us and listed in our Price List are inclusive of VAT and all Charges that appear on your bill are inclusive of VAT. We may vary our Charges from time to time upon notice in accordance with this Agreement.”

Edited to add another clause.

MOH

Xterminator wrote: »

you sign up to the contract as its written. It cannot be altered by verbal agreement, or assumptions etc.

If it is not in writing, then you have no basis in contract law to claim breach of contract.

watch judge judy for a day, and you will get the drift. if its not stated on the contact - then its not there. End of story.

Yet last time there was a VAT increase they all passed it on and claimed that didn't constitute a change in the T+Cs so there wasn't a get out clause.

Darc19

MOH wrote: »

Yet last time there was a VAT increase they all passed it on and claimed that didn't constitute a change in the T+Cs so there wasn't a get out clause.

But back then we all paid per minute + vat and a basic mobile bill was €70.

These days they sell vat inclusive packages and all out of bundle prices are vat inclusive.


Electricity suppliers still state vat exclusive prices, so if the 13.5% rate changed, you'd see the reduction.

But on inclusive prices, there's no obligation to reduce the price

Spocker

They don't have to pass on the rate though, so the rate will just stay at 23% for those companies that don't

https://www.irishtimes.com/business/technology/eir-decides-against-passing-on-vat-reduction-to-customers-1.4346565

Irish Times wrote:

Companies are not compelled to pass on the VAT reduction to customers although most are doing so. Minister for Finance Paschal Donohoe this week urged cuts to be passed on, saying it would help boost consumer confidence.

Sparko

Spocker wrote: »

They don't have to pass on the rate though, so the rate will just stay at 23% for those companies that don't

https://www.irishtimes.com/business/technology/eir-decides-against-passing-on-vat-reduction-to-customers-1.4346565

That doesn't mean they will keep charging 23 percent VAT, it means they won't pass on the saving to the customer.

So let's say before September, Eir charge someone 100 net + 23% VAT of 23, the customer pays 123 euro.

From September onwards, the customer still pays 123 euro, but the breakdown is now 101.65 net + 21% VAT of 21.35.

So the customer pays Eir the same amount as before, from this amount Eir pay less VAT than before over to the government and earn more from the customer as a result.

Joey321

The problem with the vat reduction is that the government said its up to the vender if they want to pass it on, so they are playing within the rules and not doing anything wrong.

SeeMoreBut

Joey321 wrote: »

The problem with the vat reduction is that the government said its up to the vender if they want to pass it on, so they are playing within the rules and not doing anything wrong.

I think that was more targetted for the same company who could do with an extra few cents, euro and not for the companies who income is millions

Joey321

That was a blanket statement, if you don't make it compulsory you will get some that don't pass it on,

gipi

For contrast, Digiweb have passed on the reduction of VAT from this month. My monthly bill went down by 70c or so.

Xterminator

We can all agree the VAT reduction should have been passed on. Nor am i a lawyer.

But clearly they are within the agreement not passing on the price cuts in my laypersons opinion. their prices are still inclusive of VAT and the amount the customer pays has not been changed.

What has changed is the amount they keep and the amount they had over to the taxman - this is not part of the contract.

“6.1 You must pay all the Charges for which we bill you, together with any Value Added Tax and any other taxes (at applicable rates from time to time) which apply in relation to any Charges payable under this Agreement.”

“Unless stated otherwise, all prices quoted by us and listed in our Price List are inclusive of VAT and all Charges that appear on your bill are inclusive of VAT. We may vary our Charges from time to time upon notice in accordance with this Agreement.”

Electronic Writer

It's not very much extra to pay for such great services. We should be on our knees thanking these companies for everything they do. Vat , true difference would be a halving of prices and a very moody christmas for all concerned when poor employees have no money for bubbly , turkey , corona virus masks and the mortgage .

Alas !

Dempo1

Wouldn't think their in breach of contract on this, it's a temporary VAT reduction and I'd imagine the cost of re jigging their entire billing systems would be expensive, this said 3 have passed on the reduction and its rare, but I commend them for this decision.

Trampas

Dempo1 wrote: »

Wouldn't think their in breach of contract on this, it's a temporary VAT reduction and I'd imagine the cost of re jigging their entire billing systems would be expensive, this said 3 have passed on the reduction and its rare, but I commend them for this decision.

Things like taxes shouldn’t be expensive to change. Not like it’s a new product(s) they’re selling. Taxes can always change. So should be some table entry or file change. Just as lazy excuse for big companies to make the profit line a tiny bit healthier.

Darc19

Dempo1 wrote: »

Wouldn't think their in breach of contract on this, it's a temporary VAT reduction and I'd imagine the cost of re jigging their entire billing systems would be expensive, this said 3 have passed on the reduction and its rare, but I commend them for this decision.

4 clicks of a mouse and a text to customers is what it takes.

Peig Sayers

Got an email from Sky:

In light of the recent VAT reduction from the government, we have added a €10 Sky Store discount to your account that you can use on a Buy & Keep - HD Digital movie, this September. As you are enrolled in our VIP programme you don’t need to do a thing. So, choose a movie, grab your favourite snacks and enjoy!

I don't want a free movie, I have Netflix. I want the vat reduction instead. I rang them today and got €10 off my next bill! You don't ask, you don't get!

Electronic Writer

Peig Sayers wrote: »

You don't ask, you don't get!

Hello Peig, Can I have a loan of a tenner ?