DOMINIC COYLEanswers readers' queries
Does the old or new VAT rate apply?
Q
I received a bill from Eircom for €205.49 plus 23 per cent VAT. My problem is that I thought that those calls I made in November and December should be at 21 per cent, with the 23 per cent rate only applying in January when the new, higher rate came into force.
I made enquiries to Eircom on two occasions but to no avail and no satisfaction.
I am wondering if this is correct as I recently read a letter in Pricewatch relating to a refund in a similar case but involving O2.
- SC, Cork
A
This appears to be a classic case of the letter of the law triumphing over common sense. The 21 per cent VAT rate was increased in the last Budget to 23 per cent, with the change coming into force in the new year.
The situation appears to be that the rate of VAT is determined by the invoice date, not the date the relevant service was provided. In your case this means that although all your calls were made in November and December, the higher VAT rate was applied by Eircom because the bill was issued on January 5th.
Of course, Eircom will point out that it is simply applying the VAT rate in accordance with Revenue’s instruction and this is correct. It will also note that the rental charge element of the bill relates to the January/March 2012 period to which the higher rate would in any case apply.
The letter to which you refer relates to an O2 customer who found themselves in the same position with that telecoms provider. Having queried the bill, they secured a lower charge but O2 subsequently clarified that the VAT rate had been correctly applied but that its customer service staff “used their discretion” to offer a “goodwill gesture” – ie, they were under no obligation to.
It comes down to customer service. Your experience with Eircom has not been to your satisfaction and, in a competitive telecoms market, that means you should consider moving to one of their rivals.
It might not secure a refund in this case – although Eircom may respond to the threat of losing a valued customer by waiving the difference which, in your case, amounts to just €3.34 – but it might give you greater peace of mind.
Motor tax based on emissions or size?
Q
I have recently bought my first car, second hand. The motor tax is now due but I am confused because there seem to be two systems in operation, one based on engine size and the other on emissions. How do I know which to use or can I choose the one that is better value for me pricewise? – JK, Louth
A
As I think you suspect, the tax authorities are not inclined to offer forum shopping on tax rates. In relation to motor tax, the system depends on when the car was first registered.
If the car was registered for the first time on or after July 1st, 2008, the new emissions-based system applies. Cars registered up to the end of 2007 operate the older, engine size model,
Only those whose cars were first registered between January 1st and June 30th, 2008, can choose which system is better value for them.
This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2. E-mail: dcoyle@ irishtimes.com
