Kitz Forum

Broadband Related => ISPs => Topic started by: icanbefound on May 02, 2013, 07:32:11 PM

Title: BT no vat cease charge
Post by: icanbefound on May 02, 2013, 07:32:11 PM
hello I have recently cancelled my bt broadband account as I moved in with my partner who also has bt account.  Bt told me that I had to close my account first before I could move my email address to my partners account.  I then recieved a £30 "cease charge" which appears to be some kind of cancellation charge.  The first odd thing about the charge is that it has no VAT on it.  Bt say that the charge is to ammend their records and discoonect/replace equipment. 

I cant help but feel that this equipment is likely to be hardwired on a card. I would like to know what equipment has to be replaced on my old line or disconnected and why any charge for doing this work should not have VAT charged on it.    BT say that it is compensationary charge.  I presume that it is Openreach that does this.

I appologise if this is not an appropriate post on this forum but I am interested in the technical difficulties required to disconnect broadband which I imagine will evolve over time.  I am surprised that there is no VAT. charge.
Title: Re: BT no vat cease charge
Post by: Black Sheep on May 02, 2013, 07:37:53 PM
Never heard of that particular charge before ?? Basically, how are they gonna screw you down to pay it if you've moved on ??

You're right in as much as the PSTN/DSL will be 'ceased' by a robot. The actual 'recovery' will only be carried out on the 'Tie circuit' that carried the PSTN to the DSL equipment, or to the TAMS equipment. Generally, this will only be done if that particular set of 'ties' is required in order to provide a new circuit to someone, or if someone moves into your old premises and wants just a PSTN only circuit.

I'm not saying this isn't common practice by BT, its just I've never heard of it before.
Title: Re: BT no vat cease charge
Post by: c6em on May 02, 2013, 07:51:37 PM

I think it's not VATable as you are not being provided with goods and/or services.

It is a compensatory/cancellation charge made by the provider of a service for the ceasing of the service by the user.
I think also cancellation charges for general reservations you make and then cancel are not VAtable however reservations for a specific item mentioned in the reservation may be as it is no longer a general reservation and the specific item was being kept back for you.

Title: Re: BT no vat cease charge
Post by: kitz on May 02, 2013, 09:20:05 PM
The BT cease charge (http://forum.kitz.co.uk/index.php?topic=794.0) has been in operation for several years now, and has been various prices.   

According to this (http://www.productsandservices.bt.com/consumerProducts/dynamicmodules/pagecontentfooter/pageContentFooterPopup.jsp?pagecontentfooter_popupid=26823&s_cid=con_FURL_ceasecharge)  £30 (non vatable) is the correct current fee :(



Title: Re: BT no vat cease charge
Post by: kitz on May 02, 2013, 09:42:44 PM
Ps just found this on the bt wholesale website pricing list which states £24.74 plus vat  ::)

https://www.btwholesale.com/shared/document/Pricing_and_Contracts/SPPL/Section_44/Section44_Part3_01-April-11_Asymmetric_v2.doc
Title: Re: BT no vat cease charge
Post by: icanbefound on May 02, 2013, 11:16:46 PM
Thank you very much for your replies.

Blacksheep
Quote
You're right in as much as the PSTN/DSL will be 'ceased' by a robot. The actual 'recovery' will only be carried out on the 'Tie circuit' that carried the PSTN to the DSL equipment, or to the TAMS equipment. Generally, this will only be done if that particular set of 'ties' is required in order to provide a new circuit to someone, or if someone moves into your old premises and wants just a PSTN only circuit.
whats going on is that I am keeping my old house but it needs a lot of renovation but as for now I am keeping the phone connected although I am with the post office and not bt.  What do you mean by the PSTN/DSL will be 'ceased' by a robot rather than ceased by the recovery of the set of ties?  Does leaving the ties on affect the working of a PSTN only circuit?  Is it that the ties are the crucial bit of equipment in a cease? sorry lots of questions and I have not a clue what those acrynims realy mean but will look them up.

c6em your the first person that I have come accross that sees that there is some way that things are not vatable. I kind of want to understand it as it might be useful, not that I am vat registered.
Quote
I think also cancellation charges for general reservations you make and then cancel are not VAtable however reservations for a specific item mentioned in the reservation may be as it is no longer a general reservation and the specific item was being kept back for you.
  where I lose it is how does this apply to doing something to telephone/internet equipment somewhere.  This charge seems to be raised by bt to pass on to openworld.  I would expect a chain of vat on that.  The other thing I cant get my head around is that the line comes to my house, for the presant it is not going anywhere and with the trend that all lines would become broadband+ in the future so why would bt want a system that tried to keep reverting to an old nonbroadband state?  Are these ties very expensive?

Kitz thanks It looks like back in 2007 that they were having trouble with this charge and that it was VATable then.  There seems to be no charge if the user "migrates" like move house/phone and stays with bt yet the cease charge would suggest that bt still has to cease on the first phone and connect to the new, could I presume that the cost of that would then have to be carried by those paying the cease? Having said that bt must pay other monies to openworld for broadband like for the maintanance of ties so it seems to be a bit odd that the randomness of ceaseing and not migrating should rely onme not being in a position to migrate.

thank you all

Title: Re: BT no vat cease charge
Post by: kitz on May 03, 2013, 01:16:08 AM
>>> There seems to be no charge if the user "migrates" like move house/phone and stays with bt yet the......

There is a BTw charge for both new connections and migration.  Some ISPs do pass on this charge to the customer, but a lot of ISPs pick up the tab in order to encourage you to go with them.   

I cant comment on the VAT element, but it would appear most ISPs seem to pass on the fee as £30 - aside from Plusnet who pass on £25

>>> where I lose it is how does this apply to doing something to telephone/internet equipment somewhere.

It may help if you have a look inside the BT exchange (http://www.kitz.co.uk/adsl/telephone_exchange.htm).

When you get adsl broadband, a BToR Frames engineer will wire up your line from the MDF on to an ADSL panel block (patch panel).  Which panel your line is wired up to depends on which type of adsl you have ie LLU such as TT, Sky etc often tend to all be grouped on their own same patch panel.  It doesnt matter so much with BTw based ISPs such as BT, Plusnet, Zen etc as they will use the same BTw MSAN.

>>>> Are these ties very expensive?

In the context of what Im about to explain below:-
~ The tie pair is the BT name for 'your' pair of wires at the exchange from the MDF and on to the adsl equipment, such as the DSLAM/MSAN or handover frame. 
~ Jumpers is the wiring into the patch panel.


------

AFAIK the PSTN (telephone voice) can be ceased automatically, as can in 'theory' the ADSL...   but......
..... and here comes the but...  (I stand here to be corrected by BlackSheep as hes our resident BT expert).....

At about the time that BTw introduced the cessation charges there were a lot of problems with LLU ISPs having 'Tags' on the line and this was causing huge problems during migration.   A TAG on the line is when an ISP hasnt released ownership of the adsl aspect of the line and that ISP is said to own the line. 

If a line wasn't ceased correctly, then it was still possible to attain a sync because your tie pair is still connected to the patch panel.. and on to the relevant DSLAM/MSAN.   

You would not have full internet access though because either/and/or  the ISP hasnt authorised you on to their network or in the case of BTw you are not authorised at the RAS  (http://www.kitz.co.uk/adsl/equip2.htm)(which is where most of the automatic stuff happens).

So what could happen is that when you cancelled your adsl, your line could still be wired up to the patch panel - this is known as Jumper in Place (JIP)...   your line could be hooked up to say a TT patch panel for ever more, even if you may have cancelled your adsl with TT.

If you were migrating, then this wouldnt matter because on that day the BToR Frames guy takes your pair from the TT panel and moves it over to say the BTw group of panels.

Even today there is the odd occasion where a delay in connecting up a new adsl connection could be subject to problems or delays because the Jumper is in Place on say an LLU ISP's panel.  Obviously this wouldnt cause you a problem as you have moved away and dont care..  but the new house owner may not be so happy if they are trying to get DSL but another ISPs tag is on the line for that phone number. 

There were also a few occasions where some exchanges had problems if Jumpers were left in place and not enough patch panels - or spaces on the patch panel - for new DSL subscribers.  Insufficient Patch Panels still can on occasion cause problems and delay.

I believe that even newer technology has fairly recently been introduced to help overcome such problems...  but rolling back the clock to the period when the cessation charges was introduced,  LLU was in its infancy and many of us on here will remember just how hard it was to move between certain ISPs and how often it all got mucked up... and how hard it could be to get tags removed. 

Hope this helps make things a bit clearer, and no doubt BS will be able to correct if I got anything wrong.
Title: Re: BT no vat cease charge
Post by: Black Sheep on May 03, 2013, 09:42:09 AM
Yeah, like you ever get anything wrong !!  ::) ;D ;D

Kitz is bang on with her comments. The only thing I can correct, after proof-reading it a hundred times  ;), is the terminology used for existing wiring ........... they are known as LIJ's (Left In Jumpers). For the OP, 'Jumpers' relates to the 'Jumper wires' used to connect services together at the Telephone Exchange. They are just a pair of wires 0.5mm in diameter, and it's these that will connect your PSTN (Public Switched Telephone Network -- or much easier to explain, your telephone number), to the DSL (Digital Systems Logic -- or, your Broadband Port).
The PSTN and DSL frequencies (PSTN= Low Frequency Analogue. DSL= High Frequency Digital) are 'mixed together' and sent down a pair of wires to your premises. The micro-filters that should be plugged into each telephone socket that is in use, ensure the correct frequency and mode are given to the equipment plugged into the sockets. No micro-filter= DLM (Dynamic Line Management) reducing your line speed. Most, but not all ISP's employ DLM.

Basically, when you ring to cancel your line (PSTN and DSL). The CP/ISP will put a 'Stop' on the PSTN and (as Kitz states) ensure you cant get beyond the RAS (Remote Access Server) with your DSL, basically you will have synch on your router but wont be able to get on-line. In a nutshell, the voltage for both PSTN and DSL is still there, but of no use.
Title: Re: BT no vat cease charge
Post by: kitz on May 03, 2013, 12:44:54 PM
Thanks BS for the additional info - LIJs I shall try to remember that.. or even better if I get chance do a page about all the BT terms.    (something else to add to the roundtoit) ;)

---

So to summarise the cessation fee is supposedly to cover the fee for removing your tie pair from the patch panel. 

In the very early days of adsl this didnt matter because all ISPs went through a BTw DSLAM and migrating of ISPs is done on a realm basis at the RAS and therefore a line could stay connected to the same patch panel and a remote request sent to block the adsl at the RAS.
   
With LLU however, the hardwiring to the ISPs own equipment (In-span handover frame --> MSAN) meant a move to a different patch panel which is done by a BT Openreach Frames Engineer.   During the earlier days of LLU certain LLU ISPs became infamous for not releasing tags properly and even 'slamming' telephone lines (taking them over without customer consent.   A new procedure was put in place and BTw took back some control which allowed them to resolve such episodes faster.

It was around this time that the cessation fee came into effect. As mentioned previously it isnt so much of an issue if you are with a BTw based ISP such as BT, Plusnet, Zen as BTw still has control at the RAS to say which realm (ISP network) you go on.  *

However, if BTw charged a cessation fee just for LLU providers and not for BTw based lines..  then the LLU providers and OFCOM would be screaming blue murder. So in the interests of 'fairness and competition'... then the fee must be passed on to all ISPs.


*Im not certain on this, but I suspect there are plenty of cases where BTw based lines are simply switched off at the RAS and the jumpers left in place.  TBH I dont blame BTw if they do..  because if a new home owner takes over the line and decides to go with a BTw based ISP then its easier and quicker for BTw to control it all via the RAS rather than having to get someone to hardwire it again.   However regardless if someone from BToR does have to physically move the wires.. OFCOM rules state that BTw cant charge LLU suppliers more than they would their own, so the fee remains the same.

If you so wished, you could probably check whether your jumpers have been left in place, by attaching your modem/router and seeing if it will sync.

Title: Re: BT no vat cease charge
Post by: c6em on May 03, 2013, 07:08:16 PM
I can't really add anymore to my initial comments - I'm a professional engineer not an accountant/tax expert.
I'd guess there will be no train of VAT from BTwholesale to BT retail.
(Same applies to early termination fees on mobile phone contracts - they will also be nonVATable.

Generally as well as nonVATable items there are items/services which are subject to VAT, however the VAT that these are subject to is not presently at the full (currently 20%) rate - it might even be zero.
You could try asking on the MSE tax sub-forum if you want to know more - there are some very clued up people on it.

The basis on which cancellation charges are not vatted is based on the ECJ decision quite recently (relatively speaking) as copied below:
ECJ case C-277/05 Société thermale d’Eugénie-les-Bains
On 18 July 2007, the European Court of Justice made its judgement on case C-277/05,
Société thermale d’Eugénie-les-Bains, concerning deposits retained when a transaction was
cancelled. The Court ruled that articles 2(1) and 6(1) of the Sixth VAT Directive must be
understood to mean that amounts paid as a deposit in the context of contracts for hotel
services subject to VAT, in cases where customers make use of their right to cancel and the
hotel operator retains these amounts, must be considered as flat-rate compensation due to
termination of the contract, to compensate the damage suffered as a result of the customer’s
failure to conform to the contract, with no direct link to any service provided for valuable
consideration, meaning that these amounts are not subject to VAT.



Title: Re: BT no vat cease charge
Post by: c6em on May 03, 2013, 08:15:28 PM
As a further thought:
Black Sheep has very helpfully said what might or might not be done as part of the cessation but I think the OP needs to step back from linking the charge to the actual work done.
There is a tendency these days in consumer land to want to link such charges to the actual time spent and then claim they are 'outrageous'.  Example might be producing a copy of a bank statement for £5.  The claim naturally is that its done by computer and costs 5 pence.

Trying to cost up the price being charged against the work actually being done is fundamentally wrong as it does not take into account in anyway the overheads of running a business which have to be paid whether or not any work is actually done. (Rent paid for buildings being an example).
So in my £5 bank statement example, the cost of producing the sheet might well be a few pence - but the cost of the Bank having and maintaining the software, the security, the staff, the printing machine, makes the cost far higher once these overhead costs are dumped onto the 'doing cost'.  Of course how you split up and allocate overhead costs into areas within the business is part of the practice and art of financial accountancy.
You are not really paying for the time of the job to be done, that is trivial - you are paying your share of the costs for the supplier having the machines to do the job in the first place.

So rather than looking what is done for the £30 one needs to look at it as simply an averaged out charge for the aggro involved in the customer ceasing the line.

Mind you I come from a business to business dog eat dog environment  where you simply charge as much as the customer will bear and if they are not outraged then you are not charging them enough  - any connection to the cost of doing a job is purely incidental.

Title: Re: BT no vat cease charge
Post by: Black Sheep on May 03, 2013, 08:30:01 PM
Good point c6em.
Title: Re: BT no vat cease charge
Post by: icanbefound on May 04, 2013, 03:47:03 PM
These are absolutly fantasic responses.  Thank you all. They are concentrating my thoughts as I paint the fence (country brown is not the same colour between wilko and ronseal) I will condense my thoughts and get some questions out if thats alright

c6em  I have put a post on mse forum and have put it in internet access forum and am hopeing for a relpy on what principles of VAT the ceases charges work.  I am struggling to see how this is a canceling a deposit issue.  I have found this on the web from Ofcom concerning the cease charge.  They call it a final word but I am not sure why
http://stakeholders.ofcom.org.uk/consultations/addcharges/pes_statement

Quote
7.'Cease' charges

If a customer decides to cancel a broadband service (and doesn't plan to switch to a new company which also uses BT's network) they may receive a 'cease' charge. This even applies if they have completed their contract. The company is passing on a charge which it has to pay, to BT Openreach.
 
Ofcom's final guidance is that a cease charge is probably fair, provided: the charge is made clear to customers before they sign on the line; and it's based only on the actual costs that come with ceasing a service.
   obviously "only" and "actual" costs will have something to do with the length of string
Title: Re: BT no vat cease charge
Post by: kitz on May 05, 2013, 12:25:56 AM
BT retail is about the only ISP that I can find that states this is not subject to VAT for their home users.

BT Wholesale quite clearly pass on to the ISP as a VAT rated fee ie £24.74 plus vat - linky (https://www.btwholesale.com/shared/document/Pricing_and_Contracts/SPPL/Section_44/Section44_Part3_01-April-11_Asymmetric_v2.doc)

Plusnet rate it as VATable  ie £25 inc VAT or £20.83 ex VAT for business customer.
Most other ISPs say £25 + VAT or £30 inc VAT.

Even more curious is the fact that BT Retail charge their Business users £25 + VAT for the cease fee - link (http://www2.bt.com/static/i/btretail/panretail/terms/pdfs/bt1130a_charges.pdf).


So... if BT Wholesale is billing BT retail £24.74 plus VAT, then BTr will be claiming back this VAT element from the Inland Revenue.   If BTr are then claiming its a zero rated service they then wont be paying anything in Tax to HM Revenue & Customs.. netting them a nice little earner of £5.06 from each residential customer.

Im not quite sure if they should be doing this, because surely its fiddling VAT and the IR.. its certainly stretching some limits.
You can bet your bottom dollar that they pass it through correctly for their business users because they know, business users and companies will in turn be claiming the VAT element back.
Title: Re: BT no vat cease charge
Post by: kitz on May 05, 2013, 12:53:24 AM
Out of curiosity Ive just found your thread on MSE (http://forums.moneysavingexpert.com/showthread.php?t=4583921).

The guy on there seems to think that its in the realms of penalty for breach of contract or early termination.

Quote
no VAT applies because you are not paying for a service or for goods, you are paying compensation to BT for failing to remain in contract.

However, you are not paying a penalty for early termination and you have fulfilled your contract.  You are supposedly paying for BT Openreach to 'pull those 2 little wires out of the MDF'. 

A service that is deemed VATable by BTo/BTw and just about every other ISP and even BTretail's business users.  The one exception to the rule seems to be BTretail residential customers.


--------

Quote
Ofcom's final guidance is that a cease charge is probably fair, provided: the charge is made clear to customers before they sign on the line; and it's based only on the actual costs that come with ceasing a service.

hmmm in that case... since BT Retail is claiming its non-VATable then surely they should either be passing on the fee as £24.74...  or should say its £30 inc VAT


-----------
Edit and stop press!!!

WOOAH..... Look at BT retails official pricing list for residential customers. Link (http://www.productsandservices.bt.com/consumer/consumerProducts/pdf/UKInternationalprices.pdf)

Quote
6. Cessation Charge
A cease charge of £30.00 (Inclusive of VAT) is payable if you cease your broadband service and do not request and use a migration access code or another recognised transfer process to move to another service provider. This charge is not raised if you are moving home and BT is unable to provide the service at the
new address





Im beginning to think that the sentence (http://www.productsandservices.bt.com/consumerProducts/dynamicmodules/pagecontentfooter/pageContentFooterPopup.jsp?pagecontentfooter_popupid=26823&s_cid=con_FURL_ceasecharge) "Charge will be £30. This charge is compensatory and not subject to VAT." is a mistake. 

Look at section 5 of the TariffGuide (http://www.productsandservices.bt.com/consumer/consumerProducts/pdf/UKInternationalprices.pdf)  Thats the one where the charge (quite correctly) is not subject to VAT because that is compensatory.
Title: Re: BT no vat cease charge
Post by: icanbefound on May 07, 2013, 10:21:54 PM
Hello Kitz  The plot thickens if not plots. Sorry I cant find a section "5" of the Tariffguide example but it does look like the cease charge is sometimes vated. Starting to wonder that you have to keep some original copy of your contract in writting.  I must admit that I dont have anything that looks like the original contract with bt which brings me to a next set of questions!  what's the difference between btretail and btwholesale and btopenreach and btbroadband and is there a just a bt? 

The other question that I have is that I have noticed that if I had moved to a new house and requested something called a mac number to be transfered there that there would have been no charge.  Two questions- why would I want a macnumber to be transfered and would it not require more "work" to be done in stopping the broadband at the first address, moving the macnumber and connecting a broadband at the new address than just ceaseing the broadband at one address and leaving the macnumber there?
Title: Re: BT no vat cease charge
Post by: kitz on May 08, 2013, 05:59:49 AM
>> Sorry I cant find a section "5"

On Page 25 -

Section 5 deals with ending the service within the minimum period.  ie before your contract has expired.  Quite correctly this is classed as compensation and is not subject to VAT.
Quote
5. Ending the service
Unless we have made a change to the prices or terms and conditions that is to your material disadvantage or paragraph 5 of the BT Total Broadband service terms applies you must pay a charge for ending BT Total Broadband within the minimum period by way of compensation to us. This charge will be calculated by multiplying the number of months remaining in your minimum term by £7.75 for Option 1, £11.50 for Option 2 and £11.75 for Option 3. The charge for Broadband Anywhere will be calculated in the same way using the following values;
£17.25 for Broadband Anywhere 50, £25.25 for Broadband Anywhere 150, £27 for Broadband Anywhere 250, and £30.25 for Broadband Anywhere 600. This charge will not be subject to VAT

Section 6 specifically deals with the Cessation Charge and shows that it is subject to VAT.

Quote
6. Cessation Charge
A cease charge of £30.00 (Inclusive of VAT) is payable if you cease your broadband service and do not request and use a
migration access code or another recognised transfer process to move to another service provider. This charge is not raised if you
are moving home and BT is unable to provide the service at the new address.


>>>  Starting to wonder that you have to keep some original copy of your contract in writting

Attaching a copy of the tariff pdf to this post for the sake of posterity.  That is their official tariff guide, you should use it to quote to them if needed.

I notice in there the same applies for BT Infinity (Page 28).
Early termination fee is non VATable
Cessation fee is subject to VAT.


Title: Re: BT no vat cease charge
Post by: kitz on May 08, 2013, 06:26:44 AM
Quote
what's the difference between btretail and btwholesale and btopenreach and btbroadband and is there a just a bt? 

Hopefully this page should explain it :- http://www.kitz.co.uk/adsl/BT.htm

Quote
The other question that I have is that I have noticed that if I had moved to a new house and requested something called a mac number to be transfered there that there would have been no charge.  Two questions- why would I want a macnumber to be transfered and would it not require more "work" to be done in stopping the broadband at the first address, moving the macnumber and connecting a broadband at the new address than just ceaseing the broadband at one address and leaving the macnumber there?

A Mac Key is used if you move broadband to another ISP.   - See Changing ISP - Migration and MAC key  (http://www.kitz.co.uk/isp/migration.htm)

There is no fee for the issuing of the MAC key, but there are BTw charges in relation to the physical line move.
Quite often the ISP will swallow these costs as an incentive for you to move to them.   
The costs are listed in ~ How much does it cost to migrate my broadband? (http://www.kitz.co.uk/isp/migration.htm#migration_cost) and you will see they are subject to VAT

Those prices are correct as I changed them just last week due to a new price list that came out on 1st May 2013.  The varying amounts of charges reflect the amount of work involved by the BT Openreach.

If you are moving house and wanting your service to be resumed at your new property then you should use Simultaneous Provision (http://www.kitz.co.uk/isp/migration.htm#sim_provision) and a LORN.  This too involves BTw/BToR fees, but again your Service Provider may swallow some or all of these costs to retain your custom.
Title: Re: BT no vat cease charge
Post by: icanbefound on May 08, 2013, 10:31:31 AM
Thanks Kitz.  I stand amazed by your knowledge of these matters and am glad to have found you.  I hope that I am not taking liberties. 

I must admit that I am struggling with it all.  It is interesting that a mac key is not a mac code.  I have seen it mensioned and was worried that not having a mackey might be a problem to me in the future.  The mac key seems to be nesessary for some seamless move from one address to another.  If one was not too concerned about the seamlessness of the move does one need a mac key?  What I mean is if I closed down an account and then a few weeks later decided to have a new account at a different address would a mac key be needed?  I presume that the connections would still have to be pulled from the old account by an openreach engineer and new connections made for the new account before this mac number could be used or is it some kind of purchase order number?

Thank you for the section 5 and the official tarif presumably verified by Ofcom.  Looking at the compensationary aspect of closing the account, in section 5, before the end of the contract which is not the situation that I was in.  Presumably bt still has to ask openreach engineers to pull connections somewhere and Openreach would still be chargeing bt that fee with the vat on it?  I also presume that when a switch is made from one isp to another on the same line btopenreach has to charge both isps for the work involved? 
Title: Re: BT no vat cease charge
Post by: kitz on May 08, 2013, 02:49:35 PM
Hopefully the Migration and MAC key (http://www.kitz.co.uk/isp/migration.htm) page explains it in more details, but to cut to the generalised basics

- a MAC key goes with the order and ensures that when the BT Frames engineer pulls your tie pair wires from the patch panel belonging to ISP "X" then he then inserts them into the patch panel belonging to ISP "Y".

Before MAC keys, a move to a different ISP, would mean that you had to cease adsl with ISP 'X' and only after that order had been completed could you place a new order with ISP 'Y'.  This meant that some customers could be without broadband for up to 4 weeks whilst swapping their ISP.   

The MAC key in the above case is used to tie the 2 orders together and ensure that both re-wires of the tie-pair are done at the same time. Downtime is usually in total no more than 30mins whilst the engineer does the re-jumpering.

In the case of BTw -> BTw based ISPs this can now be done electronically/remotely at the RAS.  The customer stays on the same patch panel and traffic is diverted to the correct ISP realm by RAS controls.  The MAC key is used to put the users connection from ISP 'x' to ISP 'z'.

Using a MAC key is cheaper because its one job instead of 2 separate jobs.

Title: Re: BT no vat cease charge
Post by: kitz on May 08, 2013, 02:51:44 PM
Quote
>>> What I mean is if I closed down an account and then a few weeks later decided to have a new account at a different address would a mac key be needed?

A MAC key is not applicable in this case, the MAC is intended so that both pieces of work are carried out at the same time.  Otherwise its a cease and a later re-provide.  As you say it could be kind of thought as a purchase order... only its a reference which ties the 2 purchases together as one.

Quote
>>> in section 5, before the end of the contract which is not the situation that I was in.

Correct

Quote
>>> Presumably bt still has to ask openreach engineers to pull connections somewhere and Openreach would still be chargeing bt that fee with the vat on it?

Correct

Quote
>>> I also presume that when a switch is made from one isp to another on the same line btopenreach has to charge both isps for the work involved? 

Nearly.   If a MAC is used then the loosing ISP doesnt have to pay a cease fee.  The gaining ISP picks up the bill.  How much this is depends on the type of migration.

 ~ WBC <-> WBC migrations = £11.00 + VAT.  This is because it can be done remotely and simply a re-direction of ISP realm.
 ~ LLU --> WBC = £39.79 + VAT. 
An engineer is involved to re-jumper the tie pair.   However if its done at the same time using a MAC and therefore only one order... its cheaper than 2 separate orders of cease @ £24.74 +VAT and new connection @ £39.79+VAT






Title: Re: BT no vat cease charge
Post by: kitz on May 08, 2013, 03:10:50 PM
PS  Ive just looked at the replies youve been given on MSE.

The first reply is correct about compensation not being VATable, but unfortunately I think he assumed that was the fee you were being charged ie early termination and not cease.  It seems to now be apparent that the cease fee should be VATable.

The second response isnt correct. :/
Its too long ago since I sat my exams as a Financial Advisor in a past life, so I didnt comment earlier on which aspects are vatable and which arent.. because I really cant remember the tiny ins and outs and all the different rates of tax on everything. 

But one of the things I know for sure is that BT (whichever dept) will be liable to pay VAT.  They will have their VAT bill to pay on any goods or service that they sold as VATable.  Deducted from this amount will be any VAT they have paid.

This is the reason why in my post here (http://forum.kitz.co.uk/index.php/topic,12475.msg235394.html#msg235394) I was unsure if they should be claiming that the cease fee is zero rated tax... because it could be considered fraud against the IR, by not passing on the VAT element and 'pocketing' the £5.06 for themselves.

The fact that they quite clearly state its VATable elsewhere leads me to think that someone has made a b00b on their site and that they are (or at least should be) passing the VAT element of your £30 on to IR.
Title: Re: BT no vat cease charge
Post by: icanbefound on May 09, 2013, 12:04:42 AM
Hello Kitz.  I am not so sure that someone writing the small print has made the "actual" boob, instead I feel that maybe Ofcom have tried to pretend that they understnd honesty.  They asked, it appeares as an after thought, for an only and actual cost for a "cease" charge.  I dont see how such a thing can exist when all the other charges might incorporate or not part of "cost" related to the practicalities of the physical engineering particuarly in a contract that would imagine compensaytionary non-vatable penalties.  None of the costs are actual or only, there in lies the madness. 

I live in a relatively remote part of broadband world of rural Lincolnshire- a part too far from the exchange to get a reliable connection. So for example for an actual cost I imagine that the engineer lives even further than me from this exchange, Swaby, and that the engineers journey costs to and from the exchange is a substantial part of their costs unlike in suburbane Croydon.  Ofcom also used the word "fair".  My intuition is that this cease charge is not fair because £30 cannot be actual in any shape or form in all actual cases.  They have also connected theses costs into connecting up new accounts with this mackey.  As you say you could wait up to 4 weeks for a new connection to be made.  Its probably because no body ever went to the exhange panel mdf thingy in the first place or had to in the second to connect it.


so I am into a rant and have lost the plot.  I will probaly pay the bloody bill but should I take this only and actual issue to Ofcom?
Title: Re: BT no vat cease charge
Post by: kitz on May 09, 2013, 01:41:55 PM
Sorry, but Im not sure if I fully understand what you meant above?

I dont think taking it to OFCOM would'nt get far, because there is some element of work involved with a cease even if its a RAS change.   LLU cease could cost more - especially to a remoter exchange -  so I guess they average it out.    I do personally think £30 is a bit steep for a cease though as far as the EU is concerned.

I fully understand why they can reduce the cost if theres a MAC involved....  the engineer is there anyhow cause hes going to be moving the wires from A to B so it probably only takes a couple more minutes to do a LLU MAC move than it would a cease. 

BS may be able to confirm for sure that it wouldnt take too much longer to move a tie pair than it would to remove it and give a better idea of the time scale.

I think the main issue is that if it should be a VATable service, when BTr are claiming on their website that it isnt.  Despite their official tariff saying it is.
Title: Re: BT no vat cease charge
Post by: Black Sheep on May 09, 2013, 06:08:49 PM
Sorry, but Im not sure if I fully understand what you meant above?

I dont think taking it to OFCOM would'nt get far, because there is some element of work involved with a cease even if its a RAS change.   LLU cease could cost more - especially to a remoter exchange -  so I guess they average it out.    I do personally think £30 is a bit steep for a cease though as far as the EU is concerned.

I fully understand why they can reduce the cost if theres a MAC involved....  the engineer is there anyhow cause hes going to be moving the wires from A to B so it probably only takes a couple more minutes to do a LLU MAC move than it would a cease. 

BS may be able to confirm for sure that it wouldnt take too much longer to move a tie pair than it would to remove it and give a better idea of the time scale.

I think the main issue is that if it should be a VATable service, when BTr are claiming on their website that it isnt.  Despite their official tariff saying it is.

It really is dependant on the size of the MDF, Kitz ?? Some 'Frames' are enormous and can be either 2-tiered, U-formed, split over different floors in the Exchange, or as with Wigan two MDF's in two different buildings (approx. 400mtrs apart) linked via extra tie-pairs !! Bolton and Warrington are difficult MDF's too, or should I say 'different' ??.

Recovering old ties is pretty straightforward and generally requires both ends disconnecting and gently pulling the jumper-wire out to avoid jumper-burn. If the wire is too tight and will cause more damage than good by yanking on it, then it just gets left in the jumper bed.

Having to re-run ties takes a while longer. An 'average' Exchange may see the task time set at 20mins to achieve this, others may have a 40min time allocated to it ?? Add wrong 'mapping' details given to us, No Dial Tone, or DSL Port not opened, faulty 'Ties', and ages on the phone trying to resolve these issues with the CP/ISP, and it can add up to well over an hour !!
Title: Re: BT no vat cease charge
Post by: kitz on May 09, 2013, 08:02:08 PM
>> An 'average' Exchange may see the task time set at 20mins to achieve this, others may have a 40min time allocated to it ?

Thank you BS for the clarification and info. The MDFs Ive seen have all been in 'rows' - even a large exchange where the DSLAMs were split over a couple of floors - so its good to note that additional time is allocated for the more tricky MDFs
Title: Re: BT no vat cease charge
Post by: icanbefound on May 09, 2013, 08:08:18 PM
Sorry Kitz I lost the writing plot last time. 

Quote
I think the main issue is that if it should be a VATable service, when BTr are claiming on their website that it isnt.  Despite their official tariff saying it is.
I think this still stands but it is complicated by the ofcoms actual and only costs for a cease whether vatable or not (should make it vatable) but should not make it a fixed price of £30 for all.  Ofcom also said the cease charge was "probably fair".  It then does not seem fair that if someone moves from one isp (ceases from it?) to another using a maccode that there should be no charge.  Apart from who is paying for this freeness (and does and who does openreach charge) what seems odd is that it implies that the isps are in collusion or odd that btr is covering any connection charges for the next isp.  Are bt covering connection charges for the next isp?

Black sheep may I ask how the charges are made between Openreach and btbroadband for any works undertaken by the engineers in these exchanges.  Is it by time allocated, actual time or some other method?
Title: Re: BT no vat cease charge
Post by: Black Sheep on May 09, 2013, 08:22:15 PM
icanbefound ........ I honestly have no idea how any of the costings are calculated. That is decided way above my pay grade and tbh, is of no concern to the engineers. As you can imagine, competition in this market is fierce and tariffs change almost daily. One ISP may charge for something another ISP is willing to foot the bill for themselves, in order that they get your business ??

Sorry, I am of no help whatsoever with billing.

Title: Re: BT no vat cease charge
Post by: Black Sheep on May 09, 2013, 08:29:07 PM
>> An 'average' Exchange may see the task time set at 20mins to achieve this, others may have a 40min time allocated to it ?

Thank you BS for the clarification and info. The MDFs Ive seen have all been in 'rows' - even a large exchange where the DSLAMs were split over a couple of floors - so its good to note that additional time is allocated for the more tricky MDFs

Yes, Kitz .... that is certainly the norm for MDF layouts. However, with the advent of LLU and in some Exchanges, limited floor space, the planners came up with the 'U Frame' whereby there is a 'Bridge section' bolted onto the original MDF that runs at 90 degrees for a particular distance to where there is space to install additional 'Verts' to accommodate all the extra 'Equipment blocks'. This is offset at 90 degrees to the 'Bridge section', therefore looking like a 'U'' shape when completed. Hope this makes sense ??
Title: Re: BT no vat cease charge
Post by: icanbefound on May 09, 2013, 11:09:44 PM
Blacksheep (as it happens I went to Masham last week and did the tour around the Blacksheep brewry last week, they seemed quite proud about their yorkshire square "vats" but I was quite interested in the fact that the original lightfoot building was based on a tower design)

sorry but it appears that Ofcom think that somehow that for my cease charge to be fair it must be based "only" on "actual" costs, which seems to me to be something that can actualy only be to do with pay graded engineers doing things with "U" frames here or bridge frames there and the administration there of.  One of the reasons that I am in my presant debarckle is that I asked bt customer services if I could move my email addresses from one bt broadband account to another broadband account and I was told that I could not unless I cesseased the first acoount and hense incur the £30 non VAT charge. I still dont understand that nor believe that is not possible. I am not saying that I wanted to keep my original broadband but I wanted to keep my btyahoo email addresses as thats how everybody I know has communicated with me for the last 15 years. 

Just as an aside theres this btFon thing going on which I think bt seem to miss a "trick" on.  I was, still am through my partners account, on Fon.  I have tried to return the broadband box but bt customer services have said that I can keep it even though I have been quite insistant that since this bother with the cease charge I am worried that they may charge me for the equipment which as far as I was informed was suppied "free" so long as I agreed to a "contract" which seems to be where bts' compensationary vatfree charge model comes from.  What I wonder is why doesnt bt say keep the broadband box , keep it on and stay in as a fon user.  They seem to sell it as a simple exchane in which you allow your physical location to be a transmitter in exchange for you being able to access it worldwide.
Title: Re: BT no vat cease charge
Post by: kitz on May 10, 2013, 12:35:21 AM
Quote
  It then does not seem fair that if someone moves from one isp (ceases from it?) to another using a maccode that there should be no charge.

In days of old, if you wanted to move ISP then you did have to cease... wait a week... then when the line was clear from the old ISP, then you could place an order to move to your new ISP.  Obviously this was not satisfactory because it meant a period of time when people were without internet access.

The MAC key is used in effect to link a cease and new provide order together, so that both are done at the same time.. only needing the engineer to work on the line the once, rather than on 2 separate occasions.

They dont get off scott free there is a £39.79 + VAT fee for this work which is billed to the new ISP. 
Its only £11 for WBC -> WBC because theres 'no man at the exchange' needed for physical moving of wires.

A new connection can be up to £43.59 + VAT depending upon the exchange (Market 3).

I really cant comment on the pricing structure and why they charge what they do :(

Quote
but should not make it a fixed price of £30 for all

I'm just about to throw my hands up in the air, because I checked the price list just a couple of weeks ago when I updated the site....  and checking the price list tonight Ive found something else.

The cease fee appears to now be banded for WBC

Market 3 = £31.12 +VAT,  Market2 £6.71 + VAT, Market 3 £5.41+VAT



grrr.. not always easy to find stuff when you need logins linky (https://www.btwholesale.com/pages/static/Products/Broadband/Wholesale_Broadband_Connect/pricingandcontract.htm)....  saunters off to make amendments to the site, because the above does only apply to WBC and not 20CN maxdsl etc  :mad:]
Title: Re: BT no vat cease charge
Post by: kitz on May 10, 2013, 12:46:30 AM
One of the reasons that I am in my presant debarckle is that I asked bt customer services if I could move my email addresses from one bt broadband account to another broadband account and I was told that I could not unless I cesseased the first acoount and hense incur the £30 non VAT charge. I still dont understand that nor believe that is not possible. I am not saying that I wanted to keep my original broadband but I wanted to keep my btyahoo email addresses as thats how everybody I know has communicated with me for the last 15 years. 


Ummm  not quite sure how to break this to you...   :'(

I havent been with BT as an ISP for way over 10yrs but I still kept my BTYahoo email address  (myname@btinternet.com)   I only abandoned it a couple of years ago cause it was full of junk and never used it.  I believe as long as the account is accessed once every 3 months then they dont delete it.  I certainly kept mine for about 8yrs. :-[
Title: Re: BT no vat cease charge
Post by: c6em on May 10, 2013, 08:51:05 AM

Yes,
A person I communicate with regularly has been on Talk Talk for ages, however they actually use their BT email address for all communication - presumably for the same reason that this is the one everyone knows.
I've no idea if you needed to do anything to ensure you keep the address live when you leave BT.
(On Plusnet I think you have to pay them some fee to keep the email address(s) operating if you leave them as an ISP.)
Title: Re: BT no vat cease charge
Post by: kitz on May 10, 2013, 11:15:09 AM
>>> On Plusnet I think you have to pay them some fee to keep the email address(s) operating if you leave them as an ISP.

Plusnet also let you keep it for free - as long as you access it once a month.  I still have (and use) my PN email address despite leaving them many years ago.

You can still collect mail via POP3, but because their SMTP requires authentication as being on their realm, to send mail you can either use their webmail service.. or do what I do and insert your new ISP's SMTP server.   This is easy to configure in the likes of outlook (see attached). 

All settings are the same - just insert any valid SMTP server...  this is also what I did to retain my btyahoo account before I ditched it.

However in icanbefound's case because the 'new house' was already on a BTrealm, then he wouldnt have even needed to change SMTP.

---
edited to attach screen cap
Title: Re: BT no vat cease charge
Post by: HPsauce on May 10, 2013, 11:40:16 AM
I still have (and use) my PN email address despite leaving them many years ago.
Ditto. And my account (which still pays me on referrals). Might be reactivated sometime soon, depending on when this objet d'art which just appeared at the end of my road goes live.  ;)
(http://i436.photobucket.com/albums/qq81/ourpcman/BTcab_zpscb360b39.jpg)[/URL]
PS. Sorry digressing maybe too far.  :-[
Title: Re: BT no vat cease charge
Post by: kitz on May 10, 2013, 11:47:34 AM
I still have (and use) my PN email address despite leaving them many years ago.
Ditto. And my account (which still pays me on referrals). Might be reactivated sometime soon, depending on when this objet d'art which just appeared at the end of my road goes live.  ;)


Oooh nice one HP...  I still havent decided yet what Im going to do.... going to be a sad day when Be* eventually is fully encompassed into sky :(
Title: Re: BT no vat cease charge
Post by: HPsauce on May 10, 2013, 11:52:06 AM
I still havent decided yet what Im going to do....
Nor me, I'll wait and see what Sky has to offer, but given I absolutely will and must stay with BT for my phone and  I'm now on a Market 3 exchange PlusNet will be hard to beat.
Title: Re: BT no vat cease charge
Post by: burakkucat on May 10, 2013, 05:32:42 PM
Ditto. And my account (which still pays me on referrals). Might be reactivated sometime soon, depending on when this objet d'art which just appeared at the end of my road goes live.  ;)
(http://i436.photobucket.com/albums/qq81/ourpcman/BTcab_zpscb360b39.jpg)[/URL]
PS. Sorry digressing maybe too far.  :-[

b*cat purrs with delight at the sight of a Huawei cabinet, in which will be found a SmartAX MA5616 MSAN.  :)
Title: Re: BT no vat cease charge
Post by: HPsauce on May 10, 2013, 05:48:51 PM
The sad thing is that, with some help from others, we've worked out what is going on.  :'(
Several of these have appeared on the outskirts of my exchange area and knowing now which cabinets they're linked to (following the dig lines) it looks like BT will be servicing the longer (i.e. slower on ADSL) lines only (at least initially) that are also outside of the Virgin-cabled area.

There is also a single cabinet close to the exchange (and local High Street) which is probably a response to heavy pressure in recent times from local businesses for faster broadband.

So, good news for village-centre businesses and those who are the periphery of my exchange with no cable and just slow broadband. But not so good for those who don't want to pay Virgin for their high-speed services. That cabinet will not be serving me.  :(