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How is 1&1 Internet handling the recent changes to the VAT?

VAT Increase - Jan 4th 2011
VAT has been scheduled to change once again as of Jan 4th 2011 to increase to 20% from 17.5%. As 1&1 is prepared for this change your invoice following Jan 4th 2011 will be adjusted accordingly to reflect the increase in VAT.

Domains renewed or newly registered before Jan 4th 2011 will be charged the 17.5% VAT rate. Domains renewed or newly registered after Jan 4th 2011 will be charged the new VAT rate of 20%.

VAT Reduction - Dec 1st 2008
1&1 Internet are happy to pass on the VAT savings to our customers. Please read below to find out how the changes to the VAT will affect you:

Since Dec 1st 2008, 1&1 Internet has been using the reduced VAT rate of 15% on all new purchases and all renewals and monthly fees. If your invoice was generated on or after Dec 1st 2008, you have been charged the correct amount of VAT for your purchases.

As of Jan 1st 2010 VAT will return to 17.5%.

What if I paid in advance for a service before the VAT change took affect?Many products at 1&1 are charged in advance for a 3-month or 6-month period. These reoccurring charges may be partly subject to the new VAT rate. 1&1 is refunding the difference for all amounts which are greater than £3.

Here are some examples of how the changes in the VAT will affect you:

Package FeesHere's an example where a package was billed for multiple months in advance spanning the VAT change.

If on Oct 15th 2008, you paid for your package 6 months in advance then you are entitled to a partial refund. All services delivered after Dec 1st 2008 will be recalculated with the 15% VAT rate and the difference will be credited to your account. The time prior to Dec 1st 2008 was correctly charged at a 17.5% VAT rate and no adjustments are necessary.

Here's a breakdown of the transaction:

  • For services rendered from Oct 15th 2008 until Nov 30th 2008 a VAT of 17.5% was added to your purchase.
  • For services to be rendered from Dec 1st 2008 until Apr 14th 2009 (the end of the billing cycle), we will adjust your invoice to make sure the 15% rate is applied to the fee for those months.
Domains and Setup FeesThese fees are one-off fees and the VAT rate that is current will be applied at the time of the purchase.

If your domain was registered or renewed before Dec 1st 2008 then the 17.5% VAT rate was applied to your purchase. Any domain that was registered or renewed after Dec 1st 2008 will be calculated with the 15% VAT rate.

As of Jan 1st 2010 VAT will return to 17.5%.

For additional information, you may want to reference:
  • Please explain the adjustments to my invoice