Apologies if this has already been asked already (I did do a search but nothing came up!)
One of my clients has just started taking credit card payments. For payments of over £300, if the customer chooses to pay the invoice with a CC my client is going to pass on the charges he has to pay onto the customer (3% of the gross). So, to my question, is that extra 3% liable for VAT?
Also, I am intending to just add the charges onto the original invoice, is this the correct way to account for them? Or is there a better way I have not thought of?
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 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.
