Polish VAT scam

But in one case he's paying for a TV+VAT and in the other for TV+VAT+fee. Therefore the goods are more expensive in one case than the other even though the same amount of dosh leaves his bank account at the end of the day.

Case 1:

Goods worth £100/1.175 = £85.11 or so, VAT thereon: £14.89 or so, adding up to £100.00.

Case 2:

Goods worth £100/1.175, discounted to £97.50/1.175 = £82.98 or so, VAT thereon: £14.52 or so, adding up to £97.50, plus £2.50 credit charge, adding up to grand total of £100.00

So because in case 1 the goods are not discounted, they cost 2.56% more than they do in case 2. Cor, look, even the rounding to whole pence leaves the ratio almost right: £85.11/£82.98 = 1.02567.

In message , Alex writes

Possibly

Er,, thanks for re-stating the conundrum for us which has been made clear here many times before.

So, if what you say is true, if the goods are the same price, and the total cost is the same, where can the 2.5% handling charge come from if the total cost of the goods isnt (in effect, but not shown explicitly) reduced by the same amount?

Maybe I'm losing the plot here. Most businesses don't suffer one way or the other because of VAT - apart perhaps from the cashflow effect. So why would they be particularly bothered about on which total VAT is levied? Surely they're 'bothered' since they see this as a way of reducing the cost to the customer who chooses to pay by cc. In your example they are charging £100 whatever the payment method, there is no advantage being given to the customer, and so why are they exercised by it?

Rgds

__ Richard Buttrey Grappenhall, Cheshire, UK __________________________

Most customers in retail shops don't get to claim the VAT back, so if they can charge £100 in total, and send less of it to HMCE, there is more left for the shop to keep.

The 2.5% handling charge comes from their overheads.

If you pay cash, they have to pay someone to take it to the bank. They don't add that to your shopping bill.

really..? when the government loses tax to tax avoidance scams, it's people who pay their taxes who are the losers...

In message , Jonathan Bryce writes

I know, but that is a vatable service. What is your point?

... and so far have lost. It's either at the appeal court or the House of Lords now.

"Alex" wrote

That's exactly what John is saying. Why do you keep asking him to repeat it?!

nah, the governemnt just gets to waste less.

Phil

customer pays £100 in both cases, with credit card 44p is retained by shop rather than handed over to HMC&E.

If you're a business the goods cost you more as you can only claim back the smaller amount of VAT paid over in the shop/filling station/etc and have paid the same total. So business customers don't like ti.

Phil

"Phil Thompson" wrote

That's an interesting concept - scammers making the government more efficient! How does that work, then?

"Phil Thompson" wrote

Make that a difference of only 37p (not 44p) - 14.52 instead of 14.89.

"Phil Thompson" wrote

Nah - the business should apply the HMC&E rules - not those applied by the renegade shops. Until, that it, HMC&E change their opinion (they haven't yet).

Err yes, but by the same token they can keep the same profit margin and give cash customers a small discount.

Rgds __ Richard Buttrey Grappenhall, Cheshire, UK __________________________

... but not wrong according to the courts.

How is it that HMC&E can apparently ignore the law of the land (as handed down by the courts) while awaiting the result of their appeal whereas the likes of us cannot?

wrote

But when a business pays their VAT over to HMC&E, isn't it safer to use their rules - even if the law says otherwise?

Let's put it another way - if someone who has reclaimed the equivalent "full" VAT (rather than just 97.5% as shown on the receipt/invoice), gets a VAT inspection then they can ask the Inspector at the beginning "what is HMC&E position on the 'VAT scam'?".

The inspector will give their view - to which the business(wo)man says "that's good, that is what I used!" [The VAT(wo)man can hardly then argue that the 'VAT scam' *is* valid after all, now can they!]

Because he said using one method of payment was more expensive than the other, and that isn't true.

the point is, that the question I was answering was:

"How do they stop you refusing to pay for the bit that you didn't order when the itemised bill comes"

To which I replied asking something like "can you avoid paying the credit processing fee in Tesco"

You replied that you could do this. Sorry I don't call having them reprint the bill with the card processing charge removed but the total remaining the same as "avoiding" the charge.

tim

In message , tim writes

Yes, I paid cash and didnt pay the card processing fee.

Well that is wrong as a matter of fact.

Are you aware of how the process works?

NO bill is reprinted.

This is what happens.

The goods get scanned.

The total comes up on the screen.

The cashier asks for the dosh on the screen.

I give them cash

They enter the cash tendered button.

They put the cash in the till

The receipt then gets printed. (this is the first bit of paper produced)

The bit with the '2.5% of this is nicked as a VAT scam etc..' does not appear anywhere and I am not charged the card handling fee 'specifically'. On a £100 purchase of all vatable items I would have paid £14.89 in VAT. In fact, Safeway (for it was them) arent even charged the merchant fee for a cash payment.

Therefore I avoided paying the card processing fee by paying cash. I cant see how you can disagree with this.

The "Weve nicked 2.5% etc.," bit only gets printed if you present plastic as a method of payment.