Phone firms jump the gun on VAT rise

Mobile and landline customers are being warned to examine their phone bills closely to check the rate of VAT they have been charged.

According to price comparison website uswitch.com, some phone firms are charging December phone usage at the new 20 per cent rate of VAT – even though the calls and texts were made before the VAT rise took effect.

Customer bills examined by uSwitch show some networks charging a VAT rate of 20 per cent on all calls and texts made over December.

"The bizarre thing is the phone firms are not going to make any extra money from this situation – it all goes to HM Revenue & Customs. This is lazy billing and customers are bearing the brunt," said Ernest Doku from uSwitch. "If they think they've been unfairly charged they should ask for a refund."

Coinciding with the VAT increase, some mobile networks have introduced price changes, ranging from more expensive calls to the removal of free voicemail. "The post-VAT price rises may not seem like much, but the incremental hikes on essential services like voicemail can really add up," Mr Doku said.