2.5% charge for using cards, but don't worry

Galstonian

I think that Gal is missing that RS is making a rather subtle, but clever, point.

If the shops can con the tax-man that the actual cost of the goods is 97.5p in the £, and that the other 2.5p is the cost of processing card payments, they should rightfully be charging cash customers 97.5p in the £ as they are not incurring the card processing cost.

And Martin is, IMHO, absolutely right that businesses will get stuffed by this VAT saving scam as the input VAT recoverable will fall as part of the cost is VAT-exempt bank charges.

I suspect that if the taxman ever pushed things then you would soon find large retailers would introduce a 2.5% charge for paying using any method - but they would then give a 2.5% discount for non cash purchases which is presumably reasonably easy to justify as cash does cost a lot to handle (certainly more than cards)