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 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.