Feeds

Freeserve threatens to move operation to Algeria

AOL UK VAT exemption gets the goat

  • alert
  • submit to reddit

Top three mobile application threats

Freeserve is prepared to move its Internet operation to North Africa unless a tax loophole that saves AOL UK £30 million a year is closed.

The boss of Britain's biggest ISP told The Register that he is due to meet with Customs and Excise officials next week to discuss VAT eligibility.

And unless John Pluthero is convinced that Customs and Excise will move swiftly to resolve the issue, he is prepared to move his servers to Algeria.

Then Freeserve would demand the same VAT exemption as currently enjoyed by AOL UK.

"Wanadoo [the parent company of Freeserve] already has operations in Morocco and Algeria - it would be very easy for us to do," he said.

Pluthero's comments follow a report on the European ISP market published yesterday by Merrill Lynch which points out that it is "not well known that AOL does not pay VAT in the UK".

The report continues: "The reason for this is that the AOL service is provided from outside the UK. In other words, AOL gets to keep 100 per cent of its subscription revenues instead of giving back the 17.5 per cent VAT charge that other ISPs like Freeserve remit to tax authorities. This has some beneficial valuation implications for AOL, just as it impacts Freeserve negatively."

Not surprisingly Freeserve jumped on the report and has written to the British Government demanding a change to the rules which it says disadvantages UK business.

Despite singling out AOL UK, Pluthero says his "beef is with the Government, not AOL".

"If I had been in their position I would have done exactly the same thing," he said.

AOL UK has played down the story maintaining that it complies with Customs & Excise rules.

In a statement it said: "AOL complies fully 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.

"The UK tax authorities have ruled that AOL is a provider of information services from outside the European Union - a status available to any other similarly positioned service provider," it said. ®

3 Big data security analytics techniques

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
prev story

Whitepapers

Designing a defence for mobile apps
In this whitepaper learn the various considerations for defending mobile applications; from the mobile application architecture itself to the myriad testing technologies needed to properly assess mobile applications risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.