Any Input VAT on bank charges?

When a retailer, for a single transaction, offers a simple receipt for accounting/credit-card purposes and an optional VAT receipt, they are obliged to ensure that the simple receipt cannot properly be used to reclaim VAT. If a customer tried a double-reclaim using a mutilated simple receipt, I suspect HMCE would come down on them rather than the retailer.

If such a receipt bore the VAT rate then the situation would be more interesting, and HMCE would have grounds to penalize the retailer; but I suspect that you won't find any examples of that.

Matti

"Rev Adrian Kennard" wrote

Of course they *could*, because the cost to the finance company would be substantially less than 2.5% (they'd be "on to a winner"!).

However, the retailers would never do this because they *know* that 2.5% is far too much to charge for this service ...

And not many car's fuel tanks can hold over 60 gallons!

The typical petrol receipts are identical to the "VAT receipt" they offer except for the "this is not a vat receipt". i.e. they show the VAT breakdown in full, have the vat number, etc.

Yes, I think this is legal, although it was common practice in the 80's for petrol companies to surcharge petrol customers 4%-ish above the cash price (if paying by credit card) this practice seems to have gone. However the petrol companies were really adding +4% on top of the till price for a CC customer. In the present case, the retails are having to first give CC/DC customers a 2.5% discount off the till price and then adding 2.5% back as a service charge (VAT free).

See above!

Nogood Boyo didn't write any of it - I just quoted from the C&E website.

But I don't see how C&E could resist an input tax claim based on the full value of the supply (assuming all other recovery conditions met, of course). And if they lost the case at the end of the day, they'd be on weak ground if they asked customers to repay amounts over-claimed.

Of course, the amount recovered as input tax by business customers is a tiny fraction of the retailers' output tax involved. And VAT on the

well done... :-)

Basic VAT lesson 4:

Trying to be clever just attracts attention...

How about this:

Notice 700 The VAT guide

Pro-forma invoices are often used to offer goods or services to potential customers. Such an offer may or may not be taken up, and the goods or services will not be supplied unless payment is received.

If you use pro-forma invoices in this way, they cannot be used as evidence to reclaim input tax, even if they show all the details required for a VAT invoice. You should ensure that they are clearly marked "THIS IS NOT A VAT INVOICE".

I seem to remember there are other circumstances as well. Can't swear to it but the following come to mind:

Second hand goods, where VAT is accounted for on the margin rather than the whole value.

Requests for stage payments in the construction industry.

Where did you hear that? C&E have only just issued this:

That suggests the wording may be effective but it doesn't actually apply to the case in question which is a *receipt* for money already paid, not a pro-forma invoice.

OK, sorry, I'm one layer out of step.

HMCE won the first case at the VAT tribunal

The High Court has overturned that decision (or HMCE claim 'part of the decision')

It's now going to the Appeal Court.

It still strikes me as distinctly disingenuous (if not illegal) of HMCE to claim that one should go on paying VAT according to *their* rules even when the current decision in the courts has gone against them.

It surely is not the case that simply because there is an appeal outstanding they can carry on imposing rules which the High Court have said are wrong. If this was true I could bring a case claiming that the whole VAT system was illegal and, until it reached the final level of appeal allowed, I could stop paying any VAT. (Meanwhile I'd emigrate to the Brazilian jungle!)

Indeed, it is clearly a statement that an amount of money has been paid for specific services and that a specified part of that money has been paid for VAT. It is evidence of VAT paid. Surely, at the end of the day, all you really need is proof that you paid VAT, which such receipts clearly are?

Well here is the answer then; the petrol station/retailer rings up the sale on the cash register and then put your credit card through the PDQ for authorisation. What happens if the authorisation is rejected? By printing this is not a VAT receipt than at least if the customer is unable to pay the sales receipt could be treated as a pro-forma invoice until payment could be (if ever) recovered from the customer.

Our company often send goods off to corporate customers on a "sale or return" basis with a pro-forma invoice for the reason that the goods maybe returned in lieu of payment. Interestingly, companies often send payment (possibly because they have lost the goods and cannot return it) without asking for a VAT receipt!

This is usually separate from the credit card receipt, although not always, and the ones I am thinking of get printed after you have paid - as they usually print the payment details on the receipt - i.e. it is a genuine receipt - evidence that money was paid and what for.

No. Payment often has little to do with it. VAT is a tax on supplies of goods and services.

What you actually have to show is that you've received a taxable supply from a taxable person. The normal way of showing it is a VAT invoice.

I was just making the point that there are circumstances where saying "this is not a VAT invoice" can stop it being a VAT invoice, even if the right information is present.

That's not actually what they say.

It's more complicated than that.

Dream on...

The tax amounts involved in this issue are huge... If the stores win, we taxpayers lose...

Ah, yes, you are right, of course. Hence my having to pay VAT that I have invoiced sometime before I actually get paid the VAT by the customer.

And the receipts in question are proof of receipt of a taxable supply from a VAT registered person (as well as proof of payment made) even though they state "this is not a VAT receipt".