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No BA On Business points if you don’t have a VAT number – the change they never told you about

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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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Comments (32)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Nick says:

    Unfortunately this smacks, yet again, of the clueless “corporate” in BA! My limited company has been a member of OnBusiness for over 10 years now. They brought out a similar, stupid, but not so difficult ruling, a few years ago. Their online system would not accept a “generic” email address for a business?! It had to be a “company” email address. It was easy to get around by setting one up.

    This is entirely different. My company is not registered for VAT and does not require it.

    All I can say, is that if BA close my account, based on a VAT number requirement, which is not in the T&C, nor on the website, and do not allow me to use my credited points (circa 15,000 currently) within a reasonable time, they will have a fight on their hands. 🙂

  • James says:

    “before their account was closed”

    Have accounts been closed for not adding a vat number?

    I have tried to enter my valid vat number but it tells me that it is invalid.

    • Tom C says:

      I’ve not tried this with BA, but whenever I have to enter a VAT number I try all of the below, until it works (obviously replace with your actual VAT number):
      123 4567 89 (note the spaces)
      GB123 4567 89
      GB123456789

      • Alan says:

        Exactly the same issue here using our old VAT number (we recently deregistered).

        On the upside have just spent my entire OB balance and the bookings went through without a hitch!

      • James says:

        Thanks for the tip, I have managed to add my vat number by putting a space after GB.

        GB 999999999

  • Alan says:

    Ludicrous approach from BA – have you been able to speak to anyone directly to find out if this is an intentional change or just some rather uninformed folk who don’t understand the VAT Registration does not equal being a company?!

    • Rob says:

      It is intentional based on the discussion the priest had.

      • Alan says:

        OK, thanks – even worse that they’ve made such an unannounced change. As usual they’re dodging the issue on Twitter!

  • James Ward says:

    No way!! That’s outrageous. I have two businesses. One is VAT registered and one isn’t. I credited a couple of long haul CW flights to the non-registered one so I could take advantage of the new account bonus offer of triple points. Does this mean I’m going to lose them before I can spend them?!

    • Rob says:

      No, you can spend your current points even with no VAT number in the account.

      • Alan says:

        Indeed – contrary to what was being suggested by some on FT! Interestingly OB bookings look like they should earn TP/Avios according to MMB, but it is routinely wrong – any idea if they do earn?

        • Rob says:

          They come out of a revenue bucket. ba.com may be set up to stop them posting (as it is with Gold Y redemptions in V) but AA, on the other hand ….

  • Wyvern says:

    This does not seem to have been well thought through. There seems no sensible reason to exclude companies/organisations which are not VAT registered – there are many reasons why businesses may not be required to register, such as charities and those which make VAT-exempt supplies. The criteria in the T&C of being a registered business with a valid business or company registration number is the most appropriate criteria to use.

    If OB has members which are not geniune businesses BA has the means to remove them, but insisting on a VAT registration number will prevent many genuine business from using a scheme designed to promote BA to small to medium companies, which seems counter productive.

    If companies without a VAT number cannot even spend earned points, as is being reported elsewhere, then this would seem to be very poor indeed. Any changes to the scheme should have be announced with full notice and should be in reflected in the T&C.

    I hope this is just poor IT/change implementation and that BA reverse this change as soon as possible.

  • Blacksmith says:

    Any Medical type business is exempt from VAT. So well done BA for deselecting all those wealthy cosmetic surgeons, dentists and GPs who certainly do have the turn over to make the cut. (Proud of my pun!)

  • J-P says:

    Surely the closure of accounts like this without prior warning is illegal?

    • Rob says:

      They are NOT closing accounts. I was simply suggesting that if BA wanted to get rid of non VAT businesses they SHOULD have closed the accounts after a notice period. It would have been more straightforward than what they are doing.

  • RIccati says:

    Requiring VAT number in addition to Company Registration is a duplication. Looks like it’s done for the ease of IT people and automated checks.

    Registering for VAT and submitting mandatory quarterly VAT Returns is a MAJOR administrative hassle and cost. You must keep VAT records for at least 6 years — all of them are subject to a spot check. On top, if a business charges VAT inappropriately they could be in a trouble.

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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