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VAT Rate Change

17 November 2010

From 4 January 2011, the Government will be increasing the standard VAT rate for the United Kingdom from 17.5% to 20%.

From 4 January 2011, the VAT chargeable on a customer’s bill will be at 20%.

Most of our Business customers reclaim VAT charged to them and they should continue to do this in their usual way – they will not be disadvantaged by the change.

What will happen for customers who receive a bill in January that includes usage made prior to 4 January 2011?

All VAT able usage that appears on bills from 4 January 2011 and onwards is subject to 20% VAT.

What about line rental which is charged in advance?

We charge VAT at point of invoice. Any line rental charges, subscriptions and Bolt Ons billed in advance, prior to 4 January 2010 will have already been charged at 17.5% VAT. January’s bill will be at the new rate.

What about buying devices?

From 4 January 2011, all product orders will attract the 20% rate.

How are the networks informing our customers?

O2 will contact all of our O2 customers from mid November to 3 December to let them know about the new rate:

• SME - customers will be notified via a text message and bill message.

• Corporate – customers will be notified by a bill message

For further information

Please visit www.O2.co.uk/vat or the HM Revenue & Customs website at http://www.hmrc.gov.uk