As part of the Fair Play’s VAT Campaign, it has been discovered that Sky were ordered to stop charging VAT to customers in Jersey and Guernsey by the EU.But instead of reducing monthly subscription prices, the multi-million pound company kept fees the same and pocketed the 17.5 per cent extra.They have admitted this has been the case since July 2003 but promise that the matter is under review.
A spokesman for the company told Fair Play: ‘We need to look at the cost and resources of setting up a new billing system but we do not have a date for when we may get the results of this review.’Until July last year, Sky were allowed to charge customers VAT no matter where they lived because the origin of the transmission was in the UK.
But the EU ruled that this was unfair and ordered that all digital service providers, such as satellite and internet providers, must charge the local tax at the destination of their signal.Therefore, customers in the Channel Islands have not been paying VAT for the past seven months but the monthly fees have not dropped accordingly.
A monthly subscription package costing £40 will cost the customer the same whether they are in northern Scotland, Wales, Lands End or the Channel Islands.
But by keeping the costs the same, Sky are conceding that it costs an extra 17.5 per cent to beam pictures across the English Channel.With thousands of regular customers in the Island, this makes Sky Television the biggest offenders when it comes to UK companies unnecessarily charging Channel Islanders VAT equivalent prices.
