EE refunds £1m after mistakenly charging VAT on non-EU data

EE, which was founded in 2010 via the merging of Orange and T-Mobile, says VAT of 20% was incorrectly applied when pay monthly mobile customers who travelled outside of Europe between October 2012 and October 2014 used the internet on their handset via data roaming bundles.

HM Revenue and Customs (HMRC) says VAT is not applicable on texts, calls or data roaming made or consumed outside of the EU and this has been the case since at least 1992.

Refunds range from £2 to £80 per person. Here's how affected customers will be refunded:

• Current customers – EE says current customers received text messages last week alerting them that they were due a refund and that the money was also credited to their accounts last week. If you think you're affected, check your statement to see if this refund was applied. If it hasn't been, get in touch with EE/T-Mobile.

• Former customers – YOU NEED TO CLAIM. Former EE or T-Mobile customers will not be refunded automatically. If you think you may be affected by the blunder, call customer services now to claim a refund. The number's 07953 966 250 for former EE customers and 0845 412 5000 for former T-Mobile users (see our Say No To 0870 guide to cut call costs to these numbers).

What happened?

EE says the problem occurred due to a "system configuration error" and that it only affected data roaming charges and not calls or texts. Orange users and pay-as-you-go customers are unaffected by the blunder. (See our Cheap Mobile Roaming guide to use your phone abroad for less.)

The mobile provider says around 0.5% of its 28 million-strong customer base were affected by the incident. But when MoneySavingExpert.com asked it to confirm that this would mean 140,000 people were affected, it said it was more like "tens of thousands of customers".

Back in 2010, Vodafone also issued mass refunds after it incorrectly added VAT at 17.5% to all data internet use during the peak summer holiday months of the same year. Similarly, at the time, it said those affected represented a "very small proportion" of its users. (See the Vodafone to issue mass refunds after billing blunder MSE News story.)

The news also follows a MoneySavingExpert.com investigation earlier this month, which found that EE, Orange and T-Mobile customers are charged when someone leaves them a voicemail when travelling outside the European Economic Area (EEA), even if they choose not to listen to the message. (See the Travelling outside Europe? You could incur hefty voicemail charges MSE News story.)

'This was a mistake'

EE says the error was spotted last year, but the money was never kept in its account as it was paid to HM Revenue and Customs – it says it has had to reclaim the overpaid VAT from the Government.

An EE spokesperson says: "Due to a configuration error in our billing system, made following a system change, a small number of customers were wrongly charged VAT on the the data roaming bundle outside of Europe. This was a mistake, and we are now refunding these charges and contacting affected customers to apologise for the error. "