Freeserve turns up the heat in VAT row
UK internet service provider (ISP) Freeserve is turning up the heat in its campaign against rival AOL, claiming that the US company is benefiting from a tax advantage.
UK internet service provider (ISP) Freeserve is turning up the heat in its campaign against rival AOL, claiming that the US company is benefiting from a tax advantage.
Freeserve launched its ‘AOL Vatometer’ campaign a few weeks ago after a Merrill Lynch report revealed that AOL does not pay VAT in the UK because its service is provided from the US.
As a result Freeserve is demanding that the situation be changed, claiming that AOL is saving over £30m a year in VAT and that this puts other ISPs at a competitive disadvantage in the UK.
Freeserve now claims that, since the Merrill Lynch report was published 22 days ago, AOL has saved £1,808,219. It reckons that AOL’s annual VAT saving could have been used to train and pay for 676 policemen or 1371 teachers, or even buy 63,158 computers for schools.
The UK ISP is challenging in court the Customs & Excise tax rules which mean that AOL does not have to pay VAT in the UK, on the basis that the company earns an extra £2.6m in unpaid tax for every 100,000 customers.
But AOL insists that it is fully compliant with ‘all applicable laws in all territories in which it operates. In the UK, AOL is subject to the relevant UK tax authorities. Since the AOL service was first made available in the UK in 1996, those authorities have recognised that the hub of AOL’s global network is based in the US’.
Links
Freeserve vents anger in VAT spat
In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...
View resourceIn recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...
View resourceIn a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...
View resourceThe first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...
View resourceHMRC sees the profit or loss made on buying and selling of exchange tokens as within the charge to Capital Gains Tax (CGT). Read More...
View articleThe recent IR35 case involving former Liverpool footballer and Sky Sports presenter, Phil Thompson, has drawn attention to the complexities and implic...
View articleFrom January 1, 2024, HMRC will implement new tax rules affecting individuals who sell items on platforms like Etsy, Depop, and Vinted. The new regula...
View articleHMRC reveal a small majority of people are soldiering a significant proportion of income and capital gains tax, following FOI request. Data has reigni...
View articleSteven Pinhey, technical officer at the Association of Taxation Technicians (ATT), considers how the rules on deductible expenses work in a social med...
View articleATT technical officer, David Wright, considers the implications of HMRC’s decision to remove employees with income between £100,000 and £150,000 from ...
View articleThis was the fourth largest borrowing year since records began in 1993 Read More...
View articleATT technical officer, David Wright, provides an overview of the welcome relaxation to CGT provisions for separating couples looking to transfer asset...
View article