Sky is now subject to Irish regulations

speedfreak

wonder what implications this will have? No more regular price hikes?? from fxcentre.com....

Sky is now subject to Irish regulations

Friday, 20th December 2002 08.07am



The Commission for Communications Regulation (ComReg) has determined that satellite broadcaster Sky should be subjected to the same regulations in Ireland as other broadcasters.

ComReg made its ruling yesterday and the move is likely to upset Sky which has always claimed that because it was a satellite broadcaster that is broadcasting outside the jurisdication of ComReg, it should not be subject to the same rules and regulations as RTE or TV3. The ruling also means that Sky will now have to contribute towards the running of ComReg and any other industry-wide initiatives which it is involved in.

However ComReg says that pay service that provided access to broadcast content services would be subject to regulatory requirements in the regime.

Sky has 255,000 customers in Ireland.

carrolls

Sky is now subject to Irish regulations

Sky would beg to differ. And they have a strong legal case.

watty

If sky don't like it the Gov should suspend all their bank transactions here.

If someone wants to do buisness in Ireland, they should be on a level playing field with local companies.

About time OTDR barked at Sky. Good start as Comreg!

Tom Dunne

Originally posted by carrolls
Sky would beg to differ. And they have a strong legal case.

Isn't there some European law that is on the government's side? Something to do specifically with satellite broadcasters, irrespective of where they are located?

Lennoxschips

If I wanted to sell shoes in Germany then I'd have to abide by German laws. So, by my reckoning, if you want to sell TV in Ireland then you should abide by Irish laws.

DMC

Originally posted by tom dunne
Isn't there some European law that is on the government's side? Something to do specifically with satellite broadcasters, irrespective of where they are located?

Yes there is, and thats the European law that Dermot Ahern will push through the Dail, according to today's Irish Times.

BrianD

It is imperative that Sky Digital be regulated in Ireland. At the moment all they do is take money out of Ireland - even the VAT you pay on subs goes straight to the UK Exchequer. What do the put back in - zip. They even try to stiffle our own attempts at Freeview by arguing that it will interfere with their signal.

byte

Will this mean another reason to hike subs? I was under impression that Sky subs were inclusive of IRL VAT. So if we have to pay UK 17.5% VAT plus the Irish 21% VAT, that will amout to right price!

If Sky Digital will be regulated, will the channels be regulated too? Could this mean channels be taken off Irish EPG for not having Irish content!

Tony

Originally posted by BrianD
It is imperative that Sky Digital be regulated in Ireland. At the moment all they do is take money out of Ireland - even the VAT you pay on subs goes straight to the UK Exchequer. What do the put back in - zip. They even try to stiffle our own attempts at Freeview by arguing that it will interfere with their signal.

I've said this before guys, this is simply not true. Sky pay Irish Vat
just like every other company who trades in the Irish market. So lets stick to reasoned debate.

Tony

Tony

Originally posted by irishbyte
Will this mean another reason to hike subs? I was under impression that Sky subs were inclusive of IRL VAT. So if we have to pay UK 17.5% VAT plus the Irish 21% VAT, that will amout to right price!

Your kidding right??

Elmo

Sky should pay Irish VAT however they are charging British VAT.

It is important to note that Sky have got away without regulation in Britian and can do as they please, in regards there satellite status. (This may have changed, as far as i know they are based in a northern european country, and regulation comes from there????????) Someone really needs to state this as a fact as i am not sure.

Bertie Aheare was invited to a Sky Christmas party and a TV3 Christmas party. He went to the Sky Party, TV3 where annoyed that Bertie Ahearn should not support Irish Industry. Regulation my arse. Sky have too big a lobbing group.

Originally posted by Elmo
Sky should pay Irish VAT however they are charging British VAT.

Thats an interesting point.
If Sky are charging Irish VAT that means they up untill DEC 31st anyhow are charging 12.5% as opposed to 17.5 in Britain, yet they still charge slightly more here than in the UK.
Assuming theres no special services rate in the UK.
So this is another $ky rip off??
And I wonder, if Subs will reflect the extra 1% increase in Vat from January that should be imposed on the Sky service??
If not I'm smelling something fishy.
mm

Tony

Originally posted by Elmo
Sky should pay Irish VAT however they are charging British VAT.

This is patently not true, what evidence have you for this. Do you really think the revenue would allow a company to trade here without paying VAT?

Tony

Tony

Originally posted by Man
Thats an interesting point.
If Sky are charging Irish VAT that means they up untill DEC 31st anyhow are charging 12.5% as opposed to 17.5 in Britain,

They charge 21% VAT just like everyone else who sells products other than labour etc

byte

Originally posted by Tony
Your kidding right??

About what? In case of crossed wires, when I said "right price" i meant as in "a mental price." As in terribly expensive! Anyway, thanks for clarifying. Sky DO pay irish VAT already which is what I thought.

Elmo

Sky charge British VAT. I know this as my father is an accountant and was doing accounts for a client when he noticed that Sky was charging 12.5% VAT and not 21% VAT which they should be he has written a letter about this to them but has not got a reply. If they are like most companies he won't get a reply.

Tony

12.5% VAT is an Irish VAT rate.You really think the revenue here would allow a company to get away without paying Irish VAT. If Sky were not registered for VAT then how would they claim back the VAT that I and other installers charge them on installs and set top boxes. As a matter of interest how did your fathers client claim back British VAT??

Tony

If what Elmo has posted is correct, then and the rate is 12% is being charged by Sky and paid the Irish revenue, yet they are charging slightly more here for the subscriptions, then they are ripping us off and indeed flouting the law.

Hmmm, probaly an oversight by them, though, they'll be in the Revenues advertisement for settling plus penalties:D
mm

Originally posted by Tony
12.5% VAT is an Irish VAT rate.You really think the revenue here would allow a company to get away without paying Irish VAT. If Sky were not registered for VAT then how would they claim back the VAT that I and other installers charge them on installs and set top boxes. As a matter of interest how did your fathers client claim back British VAT??

Tony

I think what Elmo may be getting at here Tony, is that the price charged for Sky sub's here being slightly more than that in the UK, reflects the UK 17.5 vat rate, but in the case of Irish revenue , they pay our Revenue only 12.5%, ie they are charging us the consumer the equivalent of the British rate.
So if thats what he's saying, then in the above case Irish Vat is being claimed, but it should be 21% inclusive.

Incidently when I looked up the Revenue website for the regulations on this, it's there in black and white that the rate should be 21% for cable co subscriptions but there is no mention of satelite tv.
That suggests to me that,$ky may be able to technically get away with this as there is no official guideline.
Tax law is often worked out on a case study basis and possibly this has been overlooked in Revenue audits.
mm

Tony

I'm actually of the belief that Sky pay 21% as it stands, I mentioned that 12.5% as being an Irish vat rate as a way of rebuking the earlier information that Sky only collect British vat. Sky certainly pay us 21% Vat on our invoices. I'm open to correction on this but I believe the 12.5 (now 13.5) rate only applies to labour in certain circumstances and things like newspapers etc. In any case none of this affects the thread topic which was regulation by the telecoms regulator who has no influence on revenue matters.

Tony

I understand what you are saying Tony, it just struck me when I was reading the Revenue document that there was no mention of a satellite delivery platform when it came to television, just cable-that smells like a possible loophole to me.

Actually the 12.5% rate can apply to any item that is installed, in other words if you own a grocery store and someone supplies and installs a fridge for your shop, you are charged 12.5% (13.5% from january 1st 2003) on the total of the invoice including the value of the fridge.
It's wierd that TV instalations are treated differently.
mm

Elmo

Just to clarify my last post when I said 12.5% VAT I ment 17.5% the british VAT rate. my mistake.

Also your bill should state an Irish VAT number starting with the letters ie for Irish VAT if this is not the case then Sky charge British VAT.

12.5% relates to food and nessacary items, while 21% relates to services. (Of the topic but White candles have 12.5% VAT on them, while Red Candles have 21% VAT. Why? Churches use white candles.)Sky should pay 21% VAT. Sky as far as I know charge 17.5% which is a british VAT rate. I will ask my father about this sometime.

Tony

Originally posted by Man
I understand what you are saying Tony, it just struck me when I was reading the Revenue document that there was no mention of a satellite delivery platform when it came to television, just cable-that smells like a possible loophole to me.

Actually the 12.5% rate can apply to any item that is installed, in other words if you own a grocery store and someone supplies and installs a fridge for your shop, you are charged 12.5% (13.5% from january 1st 2003) on the total of the invoice including the value of the fridge.
It's wierd that TV instalations are treated differently.
mm

Not necessarily the 2/3 labour / product ratio applies ie the labour must be 2/3 or more of the total price

Tony

Plesae do ask, I think you will find this not to be the case.21% does not relate to services, it is the most common vat rate applied

Originally posted by Elmo
Just to clarify my last post when I said 12.5% VAT I ment 17.5% the british VAT rate. my mistake.

Also your bill should state an Irish VAT number starting with the letters ie for Irish VAT if this is not the case then Sky charge British VAT.

12.5% relates to food and nessacary items, while 21% relates to services. (Of the topic but White candles have 12.5% VAT on them, while Red Candles have 21% VAT. Why? Churches use white candles.)Sky should pay 21% VAT. Sky as far as I know charge 17.5% which is a british VAT rate. I will ask my father about this sometime.

BrianD

Hi

Well perhaps somebody who has a Sky invoice can clarify the situation. - where does the invoice originate from, is there an Irish VAT number and is the rate of VAT shown?

My understanding - and I am not a Sky subscriber - that Sky invoice customers from the UK and NOT Ireland. Therefore that the VAT that they charge is the current UK rate of VAT on goods and services - 17.5% I believe. If Sky are invoicing from the UK and not Ireland they will charge the rates applicable at the point of invoice - 17.5%. This money goes straight to the British Government.

Tony, SKY will pay you 21% or 12.5% VAT rate as that is what you invoice them as that is the applicable rates for goods/services and labour. Where do you send the invoice to? Though technically, they are not reselling what you invoice them with so they can probably claim back very little of it.

I don't use box office, but I do know they send out a statement, which should show vat.
mm

Therefore that the VAT that they charge is the current UK rate of VAT on goods and services - 17.5% I believe. If Sky are invoicing from the UK and not Ireland they will charge the rates applicable at the point of invoice - 17.5%. This money goes straight to the British Government.

Thats a very valid point,by BrianD, Tony , not wishing to pry, but where do installers get paid from, is it a UK or an ROI bank account?

I'm smelling fish , here in that Sky may have an instalation office here, the purpose of which is to claim back Irish VAT on installer invoices, yet still bill their subscribers out of Scotland.
The subscription income being their income earned here and invoiced in Scotland would be subject to UK VAT.
Anything I purchase from the UK on the web for instance, is subject to UK not Irish VAT, Sky's television service also originates outside of the UK, and I'm pretty sure the Direct debit I signed was for a Scottish bank.

I'm guessing that Elmo would not be ofay with the problem his father had with his clients Sky invoice, due to the fact that it was incidental off hand information, and hence his confusion as to what rate applies to what good/Service.
(To clarify, services are generally 12.5%(13.5 after jan1) while goods are 21% and goods supplied with labour are also generally at the lower rate.), but it looks like the problem Elmo's father had was from the fact that Sky issued his client with a British invoice.

To drag this back onto topic slightly, if what I suspect is true, then little or nothing in terms of regulation income/tax revenue goes to the Irish authorities from $ky and that would be a shame.
mm

byte

Well I have a SBO bill from Sky and it shows an England VAT number.

(OT but I noticed Amazon.co.uk have a IE VAT number)!

Tony

Originally posted by BrianD
Hi


Tony, SKY will pay you 21% or 12.5% VAT rate as that is what you invoice them as that is the applicable rates for goods/services and labour. Where do you send the invoice to? Though technically, they are not reselling what you invoice them with so they can probably claim back very little of it.

You dont have to re sell something to claim back VAT you just offset it against what you pay or claim a refund. The invoices are sent to Scotland. For example the 1/2 price installation payment from sky is 30.99 + VAT = 37.50 which is 1/2 75 euros

Tony

Tony

Originally posted by Man
Thats a very valid point,by BrianD, Tony , not wishing to pry, but where do installers get paid from, is it a UK or an ROI bank account?


but it looks like the problem Elmo's father had was from the fact that Sky issued his client with a British invoice.

To drag this back onto topic slightly, if what I suspect is true, then little or nothing in terms of regulation income/tax revenue goes to the Irish authorities from $ky and that would be a shame.
mm

It is paid by transfer from an Irish bank account and cheques are also on a bank in Stephens green. If a commercial customer was charged British VAt then they would have no way to claim it back, this would obviously cause uproar with publicans. The former head of Sky's affairs in Ireland also told me they had to pay Irish VAT.

Tony

cgarvey

Interesting debate...

Sky are perfectly entitled to charge UK VAT (@17.5%) if they want to, as the service they offer originates from a UK company based in the UK. It may well be that they have an Irish office too though, and the only way to clarify this is for someone to check a Sky invoice

12.5% Irish rate applies to labour costs, 21% to most goods and services. So if I was a mechanic, I would charge labour + 12.5% and parts + 21%. Tony, I'm not an expert and I'm sure you're well advised, but I would have thought that your labour costs would be subject to 12.5% and not 21% VAT. Presumably, the labour accounts for the bulk of the invoice.

Irish commercial customers (with an IE VAT number) should not get charged VAT in the first place from the UK (if that is the case). A business in one country does not charge a business in another country if both have valid EU VAT numbers for their respective (but different) countries.

Intersting topic

.cg

sceptre

Originally posted by cgarvey
Sky are perfectly entitled to charge UK VAT (@17.5%) if they want to, as the service they offer originates from a UK company based in the UK.

My understanding (keeping in mind that I haven't been an accountant in quite some time) is that as Sky's Irish revenues exceed 40 grand they are required to register for VAT here and charge VAT at the Irish rate.

Tony

Originally posted by cgarvey
Interesting debate...

12.5% Irish rate applies to labour costs, 21% to most goods and services. So if I was a mechanic, I would charge labour + 12.5% and parts + 21%. Tony, I'm not an expert and I'm sure you're well advised, but I would have thought that your labour costs would be subject to 12.5% and not 21% VAT. Presumably, the labour accounts for the bulk of the invoice.

Irish commercial customers (with an IE VAT number) should not get charged VAT in the first place from the UK (if that is the case). A business in one country does not charge a business in another country if both have valid EU VAT numbers for their respective (but different) countries.

Intersting topic

.cg

2/3 rule applies to invoices were both product and labour are involved. I agree if Sky were charging from UK they should not charge a vat registered company in another EU state(EU export) because the company would not have the opportunity to claim it back. It could also be argued that I should not charge them VAT since this transaction is in the opposite direction which supports my contention that they are indeed charging Irish VAT.

Tony

Tony

Originally posted by sceptre
My understanding (keeping in mind that I haven't been an accountant in quite some time) is that as Sky's Irish revenues exceed 40 grand they are required to register for VAT here and charge VAT at the Irish rate.

Absolutely, AFAIK this threshold is still the same. can we get back on the original topic now guys?

Tony

Originally posted by speedfreak

The Commission for Communications Regulation (ComReg) has determined that satellite broadcaster Sky should be subjected to the same regulations in Ireland as other broadcasters.

ComReg made its ruling yesterday and the move is likely to upset Sky which has always claimed that because it was a satellite broadcaster that is broadcasting outside the jurisdication of ComReg, it should not be subject to the same rules and regulations as RTE or TV3. The ruling also means that Sky will now have to contribute towards the running of ComReg and any other industry-wide initiatives which it is involved in.

However ComReg says that pay service that provided access to broadcast content services would be subject to regulatory requirements in the regime.

Sky has 255,000 customers in Ireland.

Well, just to add to this, there was an article in yesterdays business section of the Sunday Independent, stating that NTL and Chorus are to sue Com REG over their high 3.5% regulatory charge.
There was more critism of Sky, which coming from an O'Rielly newspaper, i usually take with a grain of salt.
However, the following is interesting:

Claiming to operate outside of Ireland, Sky does also not payVAT to the Irish exchequer, but instead pays a lesser rate into the Brittish coffers. Based on a turnover of €190 million, the differential VAT lost to the state exceeds €6 million annually.

I've also spoke to two pub owners here locally, who have told me that their VAT inspectors disallowed claims for VAT on Irish Sky Subscriptions as it was UK VAT.
They do of course, have to pay VAT on installers fees and boxes sold in Ireland via Irish installers, but that amounts to a small fraction of what would pay if they paid Irish VAT on subscriptions here.
According to the article, they do not fall under ComREG either.
Now we in ROI already pay more for arguably a much lesser service than in the UK, so we're being done again I'm afraid
mm

Although they have a great quality service , Sky are not playing fair and can get away with it.

Tony

Interesting it seems that some pub owners are claiming this back and not others. If this is the case I'm wondering how Sky seem to operate the VAT system in both countries at the same time as I definitely make Irish VAT returns on my dealings with them.

Tony

Originally posted by Man

I've also spoke to two pub owners here locally, who have told me that their VAT inspectors disallowed claims for VAT on Irish Sky Subscriptions as it was UK VAT.

I suspect tony, that your dealings with Sky are done with the issue of an irish VAT invoice.
It would be the same invoice that,you would issue any customer whether in the UK or ROI.
I would suspect that Sky have an Irish VAT registered company to deal specifically with the hard ware and instalation payments to Installers like yourself.
That would be perfectly legal for them.The only income going to that office would be enough to cover the costs of nationwide instalations.

Regarding commercial premises claiming back the VAT on subscriptions, I wouldn't be surprised if there were a lot, but this would not survive a revenue audit as clearly it is UK VAT, ie money that was never paid to the Revenue commissioners here, but rather to the inland revenue in the U.K.
mm

Tony

Originally posted by Man
I suspect tony, that your dealings with Sky are done with the issue of an irish VAT invoice.

Actually no, although I generate an invoice here payment is made using a "self billing" invoice system, in other words they bill themselves which shows Irish VAT which should be paid by me. Unwieldy system but thats they way sky are, make it as complicated as possible.

Tony