VAT Liability of Card Handling Fees

As a result of HMRC’s appeal against the decision made in the case of HMRC v National Exhibition Centre Limited, the Upper Tribunal have now confirmed the VAT treatment of debit and credit card handling fees.  This issue has been considered by UK domestic courts on multiple occasions and it has now been concluded that these fees should be treated as a standard rated service of handling/processing payments,which falls outside of the financial services VAT exemption.

 

It is expected that this ruling will have a far reaching impact on many businesses and any organisation that makes supplies of payment-related services will be required to consider this judgement in order to assess any potential financial and operational impact. In addition, any business that has been treating these services as exempt from UK VAT prior to this ruling may now be required to account for VAT on these supplies.

 

To discuss this issue further, please call our free VAT helpline and speak to one of our experienced VAT consultants.

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