Business call savings on the cards

BRITISH businesses are losing revenue in VAT payments and administration costs that could be saved by controlling the way staff phone in while away from base. This is the message of BT's campaign to promote its Chargecard.

The card, it points out, offers a way of avoiding the hefty surcharges made by hotels, and the costs of processing employees' expenses claims for calls, as well as enabling businesses to reclaim the hidden VAT element in calls from coin phones.

John Corran, BT's card services marketing manager, said some companies had cottoned on to these savings. 'But the awareness is surprisingly low. The UK market is immature compared with that of the US, where 70 per cent of households have at least one cardholder. In the UK, it's only about 2 per cent.

'Our 550,000 business customers are saving a lot of money by using the card.'

Thorn Security of Feltham, Middlesex, reckons it will have saved pounds 130,000 in the year to March - pounds 50,000 on administration and pounds 80,000 on VAT - by giving its field engineers Chargecards.

'The decision to use Chargecards stems from a period when the business was performing below par. A new management was put in place, and this was part of a drive to save money,' said a spokesman for the company. 'Everything was looked at, and we realised there were potential savings in this area. We have 1,000 engineers out during the day, installing security and fire systems - and making lots of phone calls. We're on target to make savings of pounds 130,000.'

Mr Corran said: 'For a start, you delay your payments. Intead of paying immediately at a hotel or in a payphone, or even prepaying with a phone card, with a BT Chargecard you're paying up to three months in arrears. If you give cards to all your sales people on the road, all their phone calls can be charged to a nominated BT line, and they will be billed automatically to the company, so you save on administration costs.

'Obviously, VAT charged on hotel phone bills can be reclaimed anyway, but if you make the calls with the Chargecard you pay at normal payphone rates, which, though twice as high as for private or office calls, are not subject to hotel surcharges.'

A spokeswoman for the Consumers' Association said: 'The charges hotels levy can be incredibly high. You can be paying up to four times the cost of a standard telephone call. Hotels have been having a tough time, and I think one of the ways they see of getting revenue is by making this sort of charge for calls.

'Most hotels do indicate in their rooms the rates they charge for using the phone, but we think the typical charges are unacceptably high.' Hotels in other European countries charge similar mark-ups.

'One of the ways we advise people to get around it is by using a payphone or a chargecard,' the spokeswoman said. Even with a chargecard you would probably have to pay for the use of the line, but it would be a great deal less than if the hotel made the call for you.

Another advantage for businesses, Mr Corran said, was saving some of the time taken up in calculating National Insurance contributions. 'Many companies pay employees' full phone bills, and the non-business element is considered to be income. It's an administrative nuisance to work out the amount of National Insurance that's due on each bill. A more convenient way is to give the person a charge card billable against one of the company's nominated phone lines.'

Although cost and control were the main benefits, Mr Corran said, 'the other side, and I think the more positive side, is to improve the productivity of the workforce, by making it easier for them to keep in touch.'

Although BT is promoting its Chargecard at the moment, the abolition of peak rate charges from 9 March will not apply to payphones or cards.

The card is free, and can be used with public and private phones in the UK and overseas, at the normal payphone rate of 10p a unit. The cost is charged to a nominated BT business line.

The card can be programmed for users to call just one number, or limited to calls in the UK, or for use worldwide. Users can make calls from the UK to more than 200 countries and from 120 countries to the UK.