Credit Card surcharge - legal?

20SmthngSver

I received an invoice and at the bottom it says:

Credit card payments will be subject to a 2% surcharge against the invoice total.

Is this legal? I thought this was banned.

k3lvc

IIRC it's banned for consumer transactions but not for B2B (Business) transactions - given you're talking about an invoice received is it a business transaction (or one that's from a company that would only normally deal with business transactions)

20SmthngSver

Ah I see. Yes this is Business, not Personal.

So in our Business, which deals with trade suppliers and customers, are we allowed to charge a card surcharge?

eskbanker

20SmthngSver wrote: »

Ah I see. Yes this is Business, not Personal.

So in our Business, which deals with trade suppliers and customers, are we allowed to charge a card surcharge?

You can levy a surcharge on those paying with a business card but not those paying with a personal card.

20SmthngSver

Okay thanks.

I assume it's No Vat/VAT Exempt.

nick74

20SmthngSver wrote: »

Okay thanks.

I assume it's No Vat/VAT Exempt.

It follows the VAT treatment of the goods being sold, so if the goods have VAT charged on them the card surcharge should have VAT charged on it too at the same rate.

https://www.gov.uk/government/publications/vat-notice-70149-finance/vat-notice-70149-finance

4.7 Accounting for VAT on retail credit, debit and charge card sales
If you are a retailer:

you must account for VAT at the time of supply (see VAT Notice 700: the VAT Guide) on the full price charged to the customer for the goods/services supplied, and

if you charge for accepting payment by one of the above cards, the charge is further consideration for the supply of goods/services. VAT is chargeable at the same rate as the goods or services supplied