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New reduced European roaming prices are incorrect or unlawful

Started by: nfh
On: 02/07/2014 | 10:14
Replies: 22
Reply

by: nfh
on: 02/07/2014 | 10:14

Before advising any giffgaff members in the Help & Support forum of the new reduced roaming prices from 1st July 2014, please note that they contain a significant error. Either giffgaff is exceeding the European price caps or giffgaff has mistakenly published incorrect prices.

 

The new published roaming prices exceed the European price caps for roaming in Iceland, Liechtenstein, Norway, Gibraltar, the Åland Islands, French overseas departments, the Canary Islands, Ceuta and Melilla. If the charged prices are correct and only the published prices are incorrect, then the published prices are probably similarly incorrect for roaming in Andorra, Faroe Islands, Guernsey, Jersey, San Marino and Switzerland.

 

The price caps are specified in EUR without VAT in Articles 8(2), 10(2) and 13(2) of Regulation (EU) No 31/2012, and in order to convert the price caps to GBP, the EUR/GBP exchange rate is calculated in accordance with Article 1(7) by taking the average of the exchange rates published in the Official Journal of the European Union on 1st March 2014, 1st April 2014 and 1st May 2014, which is 0.82581. Consequently the price caps are now £0.1569/min for outgoing calls, £0.0495 for outgoing SMS and £0.1652/MB for data, yet the published charges are £0.18/min, £0.05/text and £0.19/MB repectively. UK VAT of 20% is then added only when roaming inside the EU VAT area, but not when roaming in parts of the European Union and wider European Economic Area that are outside the EU VAT area, specifically Iceland, Liechtenstein, Norway, Gibraltar, the Åland Islands, French Guiana, Guadeloupe, Martinique, Réunion, the Canary Islands, Ceuta and Melilla, in accordance with Article 19 of the Value Added Tax (Place of Supply of Services) Order 1992. This is because the United Kingdom opted to exempt non-EU VAT area roaming from UK VAT under Article 9(3)(a) of Council Directive 77/388 ("the Sixth VAT Directive") so that it could charge UK VAT on services used in the UK but billed outside the EU (e.g. US-based services marketed to UK residents).

Message 1 of 23
by: gindygoo
on: 02/07/2014 | 11:24
Gg need to get all over this if you're right.

Charlie.
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Message 2 of 23
by: alex_w
community giff-staffer

on: 02/07/2014 | 11:31

Hi,

 

I can confirm categorically that we do not charge VAT for those areas where it is not chargeable. Our charges for the countries you mention are correct, however for simplicity we are listing VAT included prices as the vast majority of our roaming charges are VAT included.

 

Our pricing page you link to specifically states that the charges listed include VAT. For those countries where VAT is not chargeable, we do not charge it. Members will be charged less than the listed charges as a result. Those members who want to figure out the specific charges for those countries can simply remove the VAT rate from the listed charges to find out what they will actually be charged.

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Message 3 of 23
by: gindygoo
on: 02/07/2014 | 11:35
Aha nice one Alex for clearing that up. I thought that somehow the op was mistaken, but alps well then. Smiley Very Happy

Charlie.
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Message 4 of 23
by: ian011
on: 02/07/2014 | 11:57 edited: 02/07/2014 | 12:22

@alex_w wrote:

I can confirm categorically that we do not charge VAT for those areas where it is not chargeable. Our charges for the countries you mention are correct, however for simplicity we are listing VAT included prices as the vast majority of our roaming charges are VAT included.

 

Our pricing page you link to specifically states that the charges listed include VAT. For those countries where VAT is not chargeable, we do not charge it. Members will be charged less than the listed charges as a result. Those members who want to figure out the specific charges for those countries can simply remove the VAT rate from the listed charges to find out what they will actually be charged.


For clarity you either need to state that VAT isn't charged or show those particular prices without the VAT.

 

It's nice to be charged less than shown, but I think it needs to be stated not left for people to "figure it out".

Message 6 of 23
Highlighted
by: nfh
on: 02/07/2014 | 12:15

@alex_w wrote:

I can confirm categorically that we do not charge VAT for those areas where it is not chargeable. Our charges for the countries you mention are correct, however for simplicity we are listing VAT included prices as the vast majority of our roaming charges are VAT included.

 

Our pricing page you link to specifically states that the charges listed include VAT. For those countries where VAT is not chargeable, we do not charge it. Members will be charged less than the listed charges as a result. Those members who want to figure out the specific charges for those countries can simply remove the VAT rate from the listed charges to find out what they will actually be charged.


@alex_w, how can this be for "simplicity"? How will customers know that some countries are VAT-free and then which specific countries and territories are VAT-free? The page is far from simple. It requires a lot of specialist knowledge about cross-border VAT within the EU, which you can't reeasonably expect your customers to have.

 

I had raised an idea on this very subject and I'm very disappointed that the same error has been made again, completely ignoring my comments about a valid problem.

 

When will the correct prices be published?

Message 7 of 23
by: ian011
on: 02/07/2014 | 13:33

I am disappointed to learn that there had already been a previous suggestion around this topic and which went unheeded.

 

I am flabergasted at the suggestion that callers should "figure it out for themselves".

Message 8 of 23
by: alex_w
community giff-staffer

on: 02/07/2014 | 15:32

@nfh wrote:

@alex_w wrote:

I can confirm categorically that we do not charge VAT for those areas where it is not chargeable. Our charges for the countries you mention are correct, however for simplicity we are listing VAT included prices as the vast majority of our roaming charges are VAT included.

 

Our pricing page you link to specifically states that the charges listed include VAT. For those countries where VAT is not chargeable, we do not charge it. Members will be charged less than the listed charges as a result. Those members who want to figure out the specific charges for those countries can simply remove the VAT rate from the listed charges to find out what they will actually be charged.


@alex_w, how can this be for "simplicity"? How will customers know that some countries are VAT-free and then which specific countries and territories are VAT-free? The page is far from simple. It requires a lot of specialist knowledge about cross-border VAT within the EU, which you can't reeasonably expect your customers to have.

 

I had raised an idea on this very subject and I'm very disappointed that the same error has been made again, completely ignoring my comments about a valid problem.

 

When will the correct prices be published?


I've discussed it with the folks in charge of this content and they've agreed to push through changes along the lines of those you've suggested. I'll update as this progresses through being prepared and released.

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Message 9 of 23
by: fruitcake1
on: 02/07/2014 | 15:36
Expect giffgaff will get onto it without delay.
Message 10 of 23