Sainsbury's Skype voucher and VAT question

  VNAM75 20:48 05 Sep 07
Locked

I went in to sainsbury's today to buy a £10 skype voucher. When I redeemed it on my skype account the balance amounted to around 12.4 euros which equates to about £8.75.

So, I have paid £10 and got back £8.75 - the difference being the VAT I had to pay.

On the voucher it says:

"..value includes 15% Luxembourg VAT to be deducted at time of redemption. Skype products are then charged VAT free"

Does this mean that when I make calls from my skype account I will charged the "excluding vat rate" per minute?

  Forum Editor 11:59 07 Sep 07

to pay VAT in Luxembourg, and when you 'redeem' your voucher by adding it to your Skype account you have to pay that VAT.

I presume you can then make calls VAT-free, because you have in effect prepaid for them.

  VNAM75 12:46 07 Sep 07

Yes, I made a few calls the next day and was deducted the excl vat rate per minute off my balance.

But I was just thinking, since I purchased the product/voucher in a UK store why have I paid the Luxembourg rate (which is lower)?

Anyway, it works great. Recommended.

  Arnie 13:22 07 Sep 07

it is also possible, that when the voucher is activated, it is considered a service.

VAT is payable on goods and services.
Anyway I have just made a 58 second call to my home phone via Skype and as you say VNAM75, the amount that is deducted from the account is exclusive of VAT.

At least we don't pay VAT twice!

  Arnie 13:30 07 Sep 07

"But I was just thinking, since I purchased the product/voucher in a UK store why have I paid the Luxembourg rate (which is lower)?"

Sorry I never answered your question.

The reason is because Skype run their operations from Luxembourg.

As the FE inferred, 15% is their present VAT rate.

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