Charging vat on Credit Card fee?

[Postforce]

Hi all

Simple question - for someone who knows the answer of course! -

We receive very few payments by credit card and when we do it goes through paypal - we are going to start adding an extra 3% to cover what paypal charge us. Is that 3% liable to vat at standard rate when we invoice it out?

Tks in advance

 

[3pic]

Following the 'Bookit Ltd' case, the VAT on credit card charges should follow that of the main supply. Basically, HMRC consider a credit card charge to be a further consideration for the supply of the goods.

So if you sell standard rated widgets, the 3% cc fee is subject to VAT at the standard rate. If you sell children's clothing at 0%, so will be the cc charge.