Longer term broadband contracts could stem from VAT increase

With the level of VAT set to be increased as of the 1st January some officials believe that consumers may start looking at taking out longer term broadband contracts.

Last year saw the UK government cut the level of VAT from seventeen and a half percent to just fifteen percent, with the hope that the two and a half percent cut would increase affordability for consumers and would help to improve the economy. However, the VAT cut was a temporary one, and the level of VAT is set to increase back to its original level of seventeen and a half percent.

A recent report has suggested that the fact that VAT is set to increase again next week could have an impact on broadband contracts, and that the VAT increase could lead to a rising number of people taking out longer term broadband contracts.

Consumers that are looking to take out broadband services over the coming week may decide on taking out a longer contract that they originally would have as a result of the VAT going up at the end of the week. Whilst the increase should only result in monthly charges going up slightly some consumers may prefer to avoid the increased charges altogether by opting for a longer contract.

However, whilst consumers may be hoping to save money by opting for a longer contract industry officials are warning that they should be careful when it comes to taking on a longer contract, as it means that they will be tied in for longer and if they are not happy with the provider may have to put up with an unsuitable service until the contract expires.

Source – Telappliant