Charged VAT on a device plan device

[Damofitz]

So, I got a Samsung S24 Ultra last month, my second concurrent phone with Three. Everything seemed to be fine until I got my bill this month only to find it's £330. Looking through, I noticed everything was normal apart from a charge of £247 for VAT.  This just happened to be the exact amount of the VAT on the Samsung S24, which is on finance and being paid off over 24 months.

I went on chat, was told there was no such charge, explained everything, sent screen shots of the bill but eventually gave up and phoned Three instead. Agent I spoke to managed to get the relevant team to identify the issue, told me it was a glitch and that it would be sorted in a couple of days. Next day, get a text to tell me my issues has been resolved, log on to find they have added another £3 and the bill now stands at £333, due out in 5 days. 

I had a charge for an early upgrade as I did get my new phone a couple of months before the old one was paid but was told I could add this amount to the current device finance plan, which I can see has happened.

Rang again, spoke to a different agent who started going on about returning my device in cooling off period possibly being the reason, which it isn't as still have the device.

She did say she could see the VAT but kept going on like I was due to pay it, I can't understand why I would be paying the VAT upfront on a 24 month device plan that was advertised as no upfront cost.  She basically said she's have to raise it to a higher team, which I thought had been done previously and I should hear back within 72 hours.

That's great as the direct debit is due out in 5 days and being in the middle of a mortgage application, I don't really want to cancel it as it will go down as a missed payment and if I pay it, a, it will leave me short for other bills, so missed payments again and b, I probably won't get it back.

Anyone have any ideas what I can do bar waiting another 72 hour but having the risk of it just being closed as resolved again and having to restart the process?

 

[Damofitz]

Just to add, with all the mortgage fees, I'm really tight this month and next so letting it come out isn't really an option as something else won't get paid but I don't see how they can resolve on a weekend and get the right amount requested for a direct debit that's due in 5 days as I'm sure they start processing a few days before

[JonathanB]

Hey @Damofitz,

I'll do my best to help. Just to confirm, VAT is always calculated at the end of the billing process. All charges and credits are pre VAT, so this may be confusing matters.

It'll be easier to walk through this if we can see the more detailed breakdown, but if you share this here, make sure to block out personal info.

On your first airtime bill when taking out finance you'll have the following:

You monthly airtime charge for your plan allowances,
Any usage charges from the previous billing period outside your allowance,
Any one off charges or credits billing period

We have to account for the value of the phone, but there should be an equivalent credit for your loan agreement. You will usually have an upfront contribution to the phone though.

And as you've mentioned, if this was an early upgrade you'll have your early upgrade fee. This doesn't always need to be paid when you agree the upgrade but if it's not, it goes on your airtime, we can't add this to the loan as that's only used for paying for the phone.

Please bear in mind all these elements are calculated pre VAT on your breakdown, but VAT does apply to them all.

Hope this has all made sense so far, but in essence yes you do pay the VAT for the phone, but over the course of the loan, not on the next bill.

What I'd suggest is, if this doesn't seem to add up, share the relevant pages from the detailed breakdown, and it'll make it clearer if there has been a miscalculation.

Without knowing your airtime, early upgrade fee amount, up front contribution, and if any other charges were applied, I don't know if there's an error here or not, but happy to help escalate this if the other bill pages make that clearer.

Thanks,
Jonathan