I've been charged VAT on a 2% credit card holiday booking fee ?

fruitpie

Hi everyone,

Just booked a flight to the USA with a travel agent. I wanted to pay by credit card, agent advised that there is a 2% charge for paying by credit card. Ok I thought, normal. However, then the agent advised that VAT is payable on the 2%.

I've never heard of this but the agent assures me it's correct.

Any advise from you guys ?

Thanks in advance.

starM

It looks VAT is payable:-

http://www.macintyrehudson.co.uk/blog-post/when-are-credit-card-fees-liable-vat

chattychappy

I believe the position is that VAT is due on the fee if it is due on the underlying sale.

starM wrote: »

It looks VAT is payable:-
http://www.macintyrehudson.co.uk/blog-post/when-are-credit-card-fees-liable-vat

I don't think the article actually concludes that:
"Abta has just announced that it has confirmed with HMRC that VAT is not due on ALL such agents fees, and will be assisting members with submissions to HMRC.[...] Abta’s view is that where the fact pattern to the charges meets very specific criteria VAT is not due. Otherwise it concedes it could be. "

Actually it's a typical law firm article. Leaves you confused enough (but impressed with their knowledge) such that you call the bloke at the bottom for some expensive "advice" !!

If I'll have time I'll do some digging....

bigadaj

Ultimately it's down to their pricing model and contract terms.

For a retail purchase you would normally be quoted a gross price, icnkusive of bat, and you'd expect any fees to be the same. At the end of the day it's only 0.3%, so assuming £1000 on flights that's only £3, however have they quoted you the flights with vat added S well? Probably not and that's the argument I'd use.

Nick_C

I hope that TA has genuinely given you a cheaper price than anywhere else. If they have, then I wouldn't worry about the small extra charge.

TAs are normally working in a very competitive market, and are usually open to waiving the CC fee to get the sale.