Europe's highest court has ruled that the huge amounts telcos paid for their 3G licences didn't include VAT, so there's no opportunity for the companies to reclaim £3.3bn quid from the treasury. The companies have long argued that the amount paid must have included the tax, which could then be reclaimed, and the case has been …
Delightful to see greed - based on the unsupported assumption that we would all meekly leave our wallets open to be pillaged at will - being rewarded so handsomely. I hope the costs were suitably high too.
I hope those chickens will be happy at home.
If it ain't mentioned on the invoice...
... then VAT isn't deductible.
That's what you get when you don't let your accountants look at a contract before you sign it.
Does that mean...
...that the licensees now owe the Government 17.5% of the billions they already paid?
re: Does that mean...
No, because not all VAT is at the 17.5 pc rate.
Also the VAT would have been paid and claimed back - it's the "claimed back" part that is being refused, as it states in the article.
The amount they paid was
You didn't have to be a genius to look at the amounts they paid, and the likely number of punters, and the likely timeframe over which they'd want to recover their costs, to realise that they'd paid far far far too much. That sum gives you an average revenue per punter per year, before you add in handsets and infrastructure and.... Anyway it was many many hundreds of pounds per year, which wasn't ever going to happen.
And then having fouled up on the financial arithmetic, they wanted their legal peoples' VAT-related incompetence to be paid for by the UK taxpayer in general? Er, no thank you chaps.
Nice to see the "justice" system can get it right sometimes.
Incidentally, anyone know when the present UK GSM licences run out? That'll be the time a UK 3G licence might be worth something (assuming they've a few years left).
I thought from previous stories that the VAT was "not applicable" rather than "exclusive", which means (I think) that it is neither due nor reclaimable.
So the operators don't pay any more, but they can't reclaim 'cos it wasn't charged in the first place.
to the best of my knowledge, are usually exempt from VAT.
RE: Does that mean...
No, if you read the article you would have seen that it just means that the telcos can't get a 17.5% reduction off the amount they already paid!
The operators wanted to claim VAT back to offset the lack of revenue from the licences. With normal 2G/2.5G phones offering nearly everything most people wanted, the uptake of 3G was never going to be enough for the operators to make a profit on the amount spent for the licences.
Since the court has decided that the licences didn't include VAT, the operators can't claim VAT back as they might on any other product or service that they buy. They won't have to pay any extra though, as no VAT was payable in the first place.
Pleeaasee what were they thinking ?
You are dealing with the Treasury. This is a direct descendant of the Robber Barons. They only know how to extract your money into their hands. Witness the Child Credit fiasco when they had to do pay out :-)
What were these people thinking ? VAT is something collected by HM Robbers & Cheats. Refunds are only permitted under extreme circumstances; you might have a carousel. Important point to note : - They are NOT registered for VAT; even if with their turnover they should be.
As someone else pointed out 'NOT on the invoice" then no VAT included. Same for dealings with a non-VAT registered company you can't use it on your VAT return.
How could business's be so niave ?
Carousel fraud irony
How ironic… organised crime gangs make billions of pounds a year exploiting loop-holes in tax laws to claim VAT on (mostly) mobile phones that they claim they are shipping around Europe and claim the VAT on each transaction (known as Carousel fraud), when the Telco providers themselves get stiffed for not being clever enough or understanding tax laws!!
Of course you can laugh all you want, but the Telco’s will have the last laugh; charging higher prices on the services that you DO use to cover the cost of the ones you DON’T. OFCOM are a joke at overseeing consumer protection, and I am sure the Government will turn a blind eye to allow the Telco’s to recoup their losses; otherwise they won’t buy the licences for the next “BIG” technology franchise!!
No Expiry Fro GSM
as far as I can find out, in the Uk the GSM licenses have no expiry date, so there is no deadline for transfrring to 3G. Also no hooks for the operators to make us change. Looks like someone really didn't do their sums, with the advent of decent availability for WiFi and the download rates you can get on that 3G might just be a very large white elephant
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