SaaS tax trouble

17Aug10

In the last few weeks I’ve had snags with both Skype and Google over billing. I could take this personally – thinking that  my bad teclo karma (which must run in the family) is now turning into bad SaaS karma? I suspect though that the problems are much more widespread.

Skype

I’ve had a Skype subscription for a little while, mostly because I use an Online Number (SkypeIn) as my ‘one number’ that then redirects to whatever device I’m using, wherever I am. Normally I just have a UK subscription, but when I travel to the US I switch to a global subscription (so that I can forward the Online Number to my US cell without running up call charges).

I was printing out receipts for my expense claims, and noticed that rather than my own name they were showing A.N.OtherSubscriber.  This seemed to have happened following my most recent switch from a global subscription to UK. WTF? I raised a support ticket, which followed the usual arc of ineptitude:

  1. Skype – ‘To change the name in your account, you will need to change your billing information. Your displayed name is always the actual billing name.’
  2. Me – ‘My billing name and address are shown correctly in my account (and haven’t changed for years). Yet it’s wrong on the most recent three PDF statements (ever since I changed to a global subscription for a short time then back to a UK subscription) – why is that?’
  3. Skype – ‘We understand your concern regarding your billing address.’
  4. Me – ‘There is no issue with address details (which don’t actually show on the PDF invoices anyway). My problem is with some totally random name being shown rather than my own. You have some kind of corruption in your billing database, which it seems that you are unwilling (or incapable) of doing anything about.’
  5. Skype – it’s your fault… ‘As we can see you have added the following name and billing address when making the orders in question’. They then divulge the full name and address of A.N.OtherSubscriber. ‘As this billing information was added to the orders you will see the same info on your invoice. We technically can not change it.’
  6. Me – ‘I have no knowledge of that person or address, and certainly made no such changes to my account. You clearly have some kind of system corruption – please correct.’
  7. Me – ‘I should also point out that you just (inadvertently) disclosed personal identifying information of one of your other customers. This will make interesting fodder for my blog post about your failure to keep accurate records or respond in a timely and reasonable manner to my concerns. I may also raise the matter with the UK Information Commissioner.’
  8. Skype – ‘Unfortunately, there was a technical issue within our system, and it might have caused the change in your billing name and address.’ At last – they admit that there’s a problem. ‘However, since we cannot change manually your billing informations,all we can do is to suggest you to cancel your current subscription and than sign up for it again, and give the correct billing informations.’

So… no fix. I did end up cancelling my PayPal payment method for the subscription, and there now seems to be no way to reinstate it. I’m left paying for my subscription from Skype credit, which doesn’t create an invoice paper trail (though obviously I can get invoices for top ups to the Skype credit itself)[1]. Nothing was done to fix the three incorrect invoices, so I’m basically expected to submit expenses to my firm/accountant/tax authorities with some other person’s name on them.

Google

My company uses Google Apps (premier edition). We started out with 8 accounts a little over a year ago, and over the course of the year that’s grown to 15. The account was set up to (the default) auto-renew using my Google Checkout account (onto my credit card). When I got the receipt through following the renewal I noticed that in addition to $750 for the 15 users I’d been charged $157.50 in tax (Irish VAT at 21%). This shouldn’t have happened as my company is VAT registered. I raised a support ticket:

  1. Google – ‘Thank you for your message. I understand that you are in the UK and have a VAT number GBxxx which you applied when you first signed up for Google Apps but you were charged VAT for your order. I’ll be happy to assist you with your case. I’ve been investigating your account and see that there is a VAT number associated to your account for GBxxx.’
  2. Me – ‘Thanks for confirming that Google does have the correct VAT number for my firm on record. Perhaps you can explain why I was charged VAT when I shouldn’t have been? I have taken a look at the Google Checkout purchase history as you suggest. None of my orders show any VAT information. The original Google Apps Premier Edition order (xxx) and subsequent additional users (xxy, xyx, xyy, yxx, yxy and yyx) were all correctly charged at zero tax. So why was my renewal (zzz) charged $157.50 in tax?’
  3. Google – ‘Thank you for your response and the detailed information for your previous order and VAT information. I have confirmed your VAT and have been investigating your issue with our billing specialist team. I was able to refund you the $157.50 VAT charge for your Premier renewal order# zzz and you should get a notification from Google Checkout shortly. I suspect that the new billing update to your account might have caused your VAT charge as it no longer saw your VAT number for your account. Currently, it’s not possible to change or re-add the VAT number to your Checkout account unless you manually renew your subscription for Premier Edition or downgrade to Standard and re-upgrade back to Premier to allow you to enter in the new information for your Checkout.’

I didn’t actually want a refund of the VAT, as we can claim that back anyway (and it will just mean fewer BA points from my credit card). I wanted Google to fix the problem, and they basically said that the problem was unfixable – use this manual workaround.

Google and VAT – still ironing out the wrinkles?

I have no insight into what’s going on behind the scenes between Google and the EU tax authorities, but from outside it seems that there have been changes recently. I registered a .org domain (for my kid’s school’s parent teacher association) via Google Apps a week or two before signing up for GApps premier edition for the company. When I paid the renewal on that recently it was $10, no tax. Over the weekend I registered another .org domain and when I cam to checkout it was $12.10 ($10 + 21% Irish VAT) [2]

Conclusion

If two of the giants of online services can’t get billing right then what hope is there for the rest of us? I must say that I was thoroughly unimpressed with Skype’s attitude and support, but it’s a classic case of you get what you pay for (and I’ve paid them very little over the years for what’s been a very useful service). Google’s support was better than I’d feared, and managed to avoid the patronising FAQ pointing – accepting straight away that there just might be a real problem. Ultimately though neither firm were able to fix things for me, and my guess is that I’m not alone.

[1] Update 23 Aug 2010 – after waiting a while (a month since cancelling PayPal?) I’ve been able to reinstate PayPal as a payment method :)

[2] I hate paying ‘Value Added Tax’ on virtual goods, more so when it’s at an elevated rate against UK VAT.



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