This was an appeal against a decision by HMRC to refuse a repayment of VAT for £414,757,878.40 of overpaid output tax. The appeal concerned accounting for VAT on mobile phone charges and specifically how they interacted with roaming charges when outside the EU. The appellant changed its terms in August 2013 so that the use of mobile phones in certain specified locations abroad no longer incurred roaming charges. Instead, usage of the device abroad counted towards the customers’ set allowances for phone calls, texts and data downloads. If the customer remained within his or her allowances in that billing period, effectively there was no marginal cost to them in using the phone in any of the specified foreign destinations; the charge was now wrapped up in the Monthly Recurring Charge (‘MRC’). 

H3G referred to this new element of the contractual package offered to its customers as &lsquo