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VAT Question - Transaction Charges

  • 28-01-2014 9:14pm
    #1
    GH83
    Registered Users, Registered Users 2 Posts: 1 ✭


    Hi,

    I am wondering if anyone could clarify something for me. If a sole trader (retailer) charges a fee for cashing a customers cheque, is this charge subject to VAT?

    I have found info relating to interest on late payment charges, which appear to be VAT exempt. And transaction charges, such as a charge for paying by credit or debit card, which are subject to VAT and as far as I can deduce are charged at the rate of VAT in the transaction, and where there is a mixed VAT transaction it is charged at the rate that makes up the majority of the transaction. (I would be grateful if anyone could confirm these for me though as I am not certain :rolleyes:).

    The fee is only charged where the customer makes no other purchase therefore there is no VAT transaction involved. Does this mean it is treated the same as a late payment interest charge? i.e. VAT exempt.

    On a side note, is the amount charged for late payment interest included in E3 on the VAT RTD?

    Thanks in advance.


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