Freeserve to up sticks amid concerns over tax burden

17 Mar 2003

The UK’s largest internet service provider Freeserve is planning on relocating its broadband internet operations to Madeira to rid itself of what it deems the UK’s unreasonably high tax burden. The ISP says that the move has been forced on it as it will only pay 13.5% in VAT compared with 17.5% currently. It added that the slim margins in the sector gave it little room for manoeuvre particularly when some of its rivals, such as AOL were not saddled with VAT charges. AOL is exempt as in 1997 it was classified as an information provider not a telecoms services provider, meaning it is not required to pay VAT.