On Business, the British Airways loyalty scheme for small companies, was ‘restructured’ on May 27th.
The net result was to make the scheme more lucrative for purchasers of premium tickets and less lucrative for buyers of cheaper tickets, as well as making it harder for every member to earn enough points for premium class tickets. I wrote more about the changes here.
When you first logged in to the new On Business website, you would have been faced with a page which asked for your VAT number, if it was not already in your profile. You could skip past this if you didn’t have a VAT number to hand.
Over the last few days, the reason for this has become apparent.
British Airways is no longer awarding On Business points to entities which do not have a VAT number.
Flight bookings made before May 27th are still OK but new bookings will not receive any points.
It is important to note that this requirement does not appear anywhere in the On Business terms and conditions or on its website.
It was brought to my attention by a priest and HFP reader who runs a religious charity. His role involves extensive travel and the charity earns and redeems On Business points to keep down its flight costs.
Charities do not register for VAT unless they have retail operations, in which case the retail arm is ring-fenced and has a separate VAT registration. This charity is now de-facto barred from On Business.
Many small businesses may not have a VAT number if they do not have the circa £80,000 turnover required to make it a legal requirement. You might argue that, under the new On Business earning structure, such companies are wasting their time with the programme anyway as they will never earn enough for a reward – but that should be up to the company.
There is a published register of VAT numbers, so making one up in order to get On Business off your back is unfortunately not an option.
British Airways is, of course, entitled to set whatever rules it likes for On Business membership. Changing the rules in secret, however, is just stupid. At the very least, this change should have been prominently announced as part of the upgrade and non-VAT entities given a grace period in which to obtain registration or spend their points before their account was closed.
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About Head for Points
Whilst I can see the annoyance in this, has anyone who legitimately has a non registered VAT company spoken directly to OB to see what they’ll do?
I have always found them to be very helpful in the past.
The priest who got in touch with me had done this. They were unwilling to help. If they won’t help a priest who runs a medical charity I don’t think you’ll be getting far.
“Businesses are NOT exempt from VAT as previous posters suggested but should be declaring their VAT inputs at 0%.”
Certainly wrong.
I own a financial services company and VAT is not a requirement.
For example , VAT is not chargeable on stock dealing commission .
Our business is not VAT registered. I’ve done a dummy (new) booking for return flights LHR to HKG departing later this year. The booking does say On Business points are available.
Doesn’t mean you will get them though!
I’ve pasted below my response to flyertalk thread on OB changes.
So I’ve received the following email a couple of weeks back:
“Thank you for enrolling onto the British Airways On Business loyalty programme.
To protect your On Business account British Airways regularly audit and check your details, and as part of this safety procedure we do ask that you provide us with the correct VAT number when you join our programme. (Please see the On Business Terms & Conditions.) However the VAT number you have provided is incorrect.
To begin your membership, can you please advise me of your correct VAT number. As your company address is in the UK you must have a UK VAT number to hold an On Business account.
If you do not send an email with your correct VAT number, British Airways reserve the right to close your account after 14 days.
If you require assistance, please contact the On Business Service Centre on 0344 493 0748.
If you would like to contact me again about this case please click on this link:
http://www.ba.com/your case”
I have politely responded saying that my company is not VAT registered. I’ve got the following back:
“Thank you for your reply regarding your On Business Account.
I am sorry but the On Business Programme requires a valid VAT number to be able to register for an account.
As you have not provided me with the requested information, I am very sorry to say that your company will not be able to hold an On Business Account and you account has been closed.
If you would like to contact me again about this case please click on this link:
http://www.ba.com/your case”
I’ve pointed out the T&C don’t mention VAT number requirement. To be fair to BA, they are free to pick and choose the companies they want to deal with under point 3.4 “Membership is offered at Our discretion and We may refuse Membership to any applicant.”. This however is a poor show (again). The final response was:
“Thank you for your reply about the On Business programme.
I am sorry you cannot register for an On Business account, as you do not have a VAT number.
The terms and conditions we have are global, but a VAT number is specified in the Enrolment form as a mandatory field.
If you wish to raise this as a complaint please use the customer relations webform found on ba.com
If you would like to contact me again about this case please click on this link:
http://www.ba.com/your case”