Vat on Credit Card Surcharge

If as part of an invoice we charge someone a credit card surcharge, is that Vatable ?

Reply to
gary jules
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I have noticed receipts from chain stores now have notes saying "2.5% is to be charged as card processing fee" etc presumably to avoid paying vat on that 2.5%, so my guess is it's zero rated.

I very much doubt big stores pay such a high percentage in reality (unless it's an amex!) so I would think they can only technically avoid vat on what it actually costs them in card fees.

Reply to
Adrian Boliston

vat on that 2.5%,

This has been proved at VAT Tribunal to be unworkable and is now waiting for a higher Court to rule. IMV it is a sham.

It's a finance charge so in this case was claimed to be exempt.

reality (unless it's an

what it actually

You're quite right, they probably only pay about 1% on average, but they were claiming that the 2.5% was exempt and thus bore no VAT. Would have saved them millions in VAT if it had worked.

Reply to
BT

surcharge, is that

Depends on your business. If your an agent acting for the supplier, you don't charge VAT on the surcharge. If you are selling as principal, C&E see it as a further payment for the goods or services so you'd charge VAT on it.

Reply to
BT

I believe that many sellers have been treating it as non-VATable, but HMCE are currently challenging that in court.

Reply to
Chris Blunt

Yeah we're just a mail order outfit. I wasn't trying to pull a flanker like the big stores, just making sure I was doing it the right way.

Reply to
gary jules

If they can avoid the surcharge and pay less, by not paying by credit card, then yes.

Reply to
Jonathan Bryce

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