Content
After U, Gordon?
Ups And Downs
Gift Horse
What A Relief!
Second Thoughts?
Last One Out...
Penalty Shoot-Out
Ain't Necessarily So
Going, Going, Gone
Papers In Order?
Death And Taxes
Passing The Buck
Hire Higher
Back Taxes, Taxes Back
Options Open
Extortion?
Sick Note
Cats And Dogs
Old-Fashioned Money
I Thee Endow?
Mother's Rights
Countdown
Nowhere To Hide
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Banks don't have to pay VAT on the charges they make for handling money transfers. Credit card companies don't pay VAT on the commission they charge to retailers for making payments for customers' purchases. The charge levied by the Odeon Cinemas telephone booking line was held to be the same sort of thing, so the customer bought a VATable ticket and a VAT-exempt payment service. Now a mobile phone company has tried to argue that another charge related to making payments was VAT-exempt. The problem was that they weren't doing the same thing as the booking service. They were charging people extra for paying by cheque, not for paying by credit card - they said that the old-fashioned way was inconvenient, so customers who used it would have to pay more. The Appeals Tribunal agreed with HMRC that this was just an extra charge for the main telephone service, and it was all VATable. Handling a credit card payment is more complicated than handling a cheque - you have to collect information and transmit it to the bank in order to make the payment happen. Collecting a bundle of paper cheques and paying them into the bank isn't the same thing. This confirms HMRC's view that, generally, extra charges for paying in a particular way are likely to be treated as part of the main supply. If you think you might be able to exempt a payment handling charge, we'll be happy to talk it over with you.  |
© Bayar Hughes & Co., 2010.