From: "BT" 
Newsgroups: uk.finance
Subject: Re: Vat on Credit Card Surcharge
Date: Thu, 8 Jan 2004 13:25:29 +0000 (UTC)

"Adrian Boliston"  wrote in message
news:btjheh$7vc05$1@ID-111900.news.uni-berlin.de...
> 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.

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.

> 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.

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.

-- 
Robert Killington
visit www.vatark.co.uk
for help with VAT

To e-mail me please do so via my website.