Being charged VAT on top of tariff - consumer contract.

[ljg14]

Hi all, 

I'm wondering if someone can offer advice on whether this is correct? 

I have recently bought a new phone via Mobile Phones Direct for an upgrade as an existing O2 customer. 

When purchasing the phone, the details showed "O2 - £34 per month (incl VAT)."

I have since received my first bill for my new tariff and it reads as the following: 

"Tariff charges - £34.54"
"Other charges - £4.58" (These are accounted for, as they are additional Apple payments)

And then it goes on to show as: 
"Total before VAT - £39.12"
"VAT - £7.27"

So my total bill is coming in at £46.29, which is obviously, over the 2 years, a lot more than what I signed up for. 

I'm concerned that I shouldn't be paying this additional VAT as Mobile Phone Direct clearly state that the £34 is inclusive of VAT and O2's contract also shows monthly payment as £34 and goes on to state that all figures shown within the contract are inclusive of 20% VAT. 

I have tried to ring O2 but the advisor wasn't very helpful. I spoke to Mobile Phone Direct and they advised the issue is with O2. 

Please can someone advise if this additional VAT sounds like an error? 

[MI5 · Accepted solution]

@ljg14 

VAT is included on all consumer contracts but your bill will show it broken down as you see.

Your first bill is always higher as it is an amalgamation of your old contract and a pro rata amount for the new one. 

https://www.o2.co.uk/help/account-and-billing/your-bill

[jonsie]

The first bill is always extra as you are also billed for the first few days before the bill is produced

Your first bill may be higher than you're expecting because it will be pro-rated. This means you'll be charged for one month's line rental as well as the first few days where they are setting up your account.

[pgn]

And your tariff will increase by the RPI figure in April, driving it up to near £38 per month, including VAT, depending on how much the RPI is (based on inflation, could be significant next April!), @ljg14 - https://www.o2.co.uk/prices

[Janey64]

I was wondering the same thing. My contract started at £53 a month including VAT (28/8/21). Now as I am coming to an end in contract it is £70 a month. I understand the increases each April but £17 a month extra is rediculous  its a 30% increase