Hi everyone,
I wanted to share my recent experience regarding the email many UK subscribers received about the sudden addition of 20% UK VAT to existing active plans. If you are on an annual commitment plan billed monthly and are being told you have to pay an “early termination fee” to cancel because of this price hike, you need to know your rights under UK consumer law.
The Situation
I signed up for a 12-month contract before Christmas at a specific, discounted monthly rate. Halfway through the contract, Topaz sent an email stating they would begin charging 20% UK VAT starting next month.
When I contacted support to cancel—because I do not agree to a price increase midterm—I was told that because it is a “regulatory tax change,” it “does not change the subscription price or the underlying agreement terms.” They then offered an “early termination link” to cancel, which demanded a $32.00 fee + $6.40 VAT (totaling $38.40) to close the account.
The Legal Side (UK Consumer Rights)
While Topaz is entirely correct that they must comply with HMRC regulations to collect UK VAT, their method of passing this cost onto existing, fixed-term retail consumers midterm is legally flawed under UK law:
The Consumer Rights Act 2015: For a B2C (Business-to-Consumer) transaction in the UK, the price quoted to a consumer must be the total gross out-of-pocket cost.
Material Change of Contract: If you are locked into a fixed 12-month commitment, the total amount leaving your bank account cannot be unilaterally increased midterm without your explicit consent. It doesn’t matter if the extra 20% is going to Topaz or to a tax authority—the fundamental financial terms you shook hands on have changed to your detriment.
Right to Terminate Without Penalty: Because the contract terms are being altered midterm, a consumer has the legal right to reject the new terms and walk away cleanly. Charging an “early termination fee” to exit a contract that the vendor is altering is a penalty, which is completely unenforceable under UK consumer protections.
How Topaz Should Have Handled This
To maintain good customer relations and respect consumer laws, Topaz should have adopted standard corporate practices for tax transitions:
Grandfathering: They should have absorbed the 20% VAT hit internally for the remaining months of any active, fixed-term contracts, and applied the VAT only upon the user’s next annual renewal.
No-Penalty Opt-Out: Alternatively, they should have notified users of the mandatory tax change and provided a clear, zero-cost option to cancel the subscription immediately if they did not wish to accept the new rate.
What You Can Do
If you are facing the same $38.40 termination demand just to stop a midterm price hike, you do not have to pay it:
Reply Firmly to Support: Advise them that under the UK Consumer Rights Act 2015, any midterm increase to your total monthly out-of-pocket cost is a material change to your fixed agreement, giving you the right to terminate early without penalty.
Protect Your Account: Log into your Topaz account portal and remove your saved payment methods (or cancel the continuous payment authority/billing agreement directly within PayPal or your banking app).
I hope this helps anyone else trying to navigate this change!
Topaz have handled this badly, I won’t be using them again.
