Feeds

Freeserve goes legal in AOL VAT spat

Judicial review

  • alert
  • submit to reddit

Gartner critical capabilities for enterprise endpoint backup

Freeserve is taking HM Customs & Excise to court in an atempt to overturn a loophole in tax law resulting in AOL's exemption from paying VAT in the UK.

The ISP, Britain's biggest, filed for a judicial review of customs treatment of AOL - which it estimates saves the American giant £40m a year -
on Friday (March 8). The case should be heard in a month or so, according to The Sunday Times, which was awarded the Freeserve scoop.

John Pluthero told the paper: "The UK government has been fobbing off Freeserve and BT for over a year on this issue. It's time for the evasion to stop and the litigation to begin."

AOL levies no VAT on its services in the UK, thanks to an indulgent -nay, eccentric - 1997 ruling that the company was a content provider operating outside the European Union, and therefore not liable to charge for VAT. If AOL UK had, like Freeserve, been a classified as a telecoms provider within the EU, then it would have had to charge VAT. AOL UK appears to have avoided this classification because its servers live in Virginia.

AOL told the Sunday Times that it was not lobbying the government on the matter. Too right, it's had a free ride on VAT for several years - probably a lot longer than it could have dreamed of.

However, Freeserve's action may be having an unsettling effect on at least one score: AOL has been notable by its absence for the broadband free-for-all in the last couple of weeks, set in train by cheaper BT wholesale prices.

According to Freeserve, AOL is delaying in introducing a broadband option in the UK, because, The Sunday Times says, of "doubts over the legitimacy of its VAT exemption. It would be damaging for it to introduce a product at a price that it could not sustain." ®

The essential guide to IT transformation

More from The Register

next story
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Premier League wants to PURGE ALL FOOTIE GIFs from social media
Not paying Murdoch? You're gonna get a right LEGALLING - thanks to automated software
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Ballmer quits Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.