2.1% price reduction for ongoing broadband services

As a result of the reduction in VAT rate from 17.5% to 15%, the (VAT inclusive) price of our ongoing broadband service will reduce by 2.1% on 1st Dec.

As this is a result of a change in VAT which is based on the tax point of the invoice, this change it will affect bills dated on or after 1st Dec 2008. Customers billed on 30th Nov will be charged the current 17.5% VAT rate.

Yesterday we changed the basis of our ongoing broadband prices to make this possible, basing prices on VAT exclusive amounts and adding VAT at the prevailing rate. This means that prices will increase 1st Jan 2010 when VAT is due to increased. Each price on our web site indicates if it is based on VAT inclusive or exclusive prices so that customers can see which prices will change as a result of the VAT change.

Call prices for our telephone services are however based on 1/4 pence per minute steps, as such we will be reducing the per minute VAT inclusive rates by 2.1% to allow for the change of VAT and then rounding to nearest 1/4 pence including VAT. For most call rates this means the VAT inclusive level will not change.