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Freeserve jokes at expense of AOL

American ISP prepares to pay UK tax

Freeserve today poked fun at US-based rival AOL, which has so far escaped paying tax on its European profits due to a loophole in the existing law. Tongue firmly in cheek, the ISP highlighted what the company's VAT saving of around £150m could buy, including six David Beckhams, 600 million sausages or a pint of beer for everyone in the UK.

Under a directive passed in February 02 by the European Union, from 1 July non-EU suppliers of digital services will be obliged to pay tax inside member states. That means AOL, which is headquartered in the US, will be subject to the same VAT rules as other UK companies.

Freeserve has been lobbying the government to enforce the directive for the last seven years. With success on its side, today the UK ISP took the opportunity to rub a little salt into AOL's wound.

Freeserve estimates AOL's VAT savings could buy:
20 percent of the Millennium Dome
17,000 AOL Connie TV ads
375 Paul Gascoignes
3.5 Zinedine Zidanes
3 Michael Schumachers
The entire Manchester United football club
Half of Her Majesty The Queen

AOL has assured customers that it will not be raising its prices to these cover costs, insisting it has been preparing for the directive's implementation for some time.

AOL UK is operating at a profit despite the heavy debts carried by AOL Europe.

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