Re: FN-FORUM: Charging for payments

date posted 9th January 2006 14:20

On Mon, Jan 09, 2006 at 02:36:50PM -0000, Andy Macnaughton-Jones wrote:
>
> Hi,
> I seem to remember from a while back that (not on the list in the news
> / press) that you can't charge somebody for using a credit card - or
> more exacly you can't charge somebody a different price for goods or
> services depending on how they're paying.
>
> Is that right ?

As of a vew years ago it is allowable for a retailer to charge a bit more
when taking payment by credit card - since the credit card company will
charge them something. AFIK that is the only allowable exception (in the UK).

> I know if you look on a till recipt from say tesco that it says that
> 2.5% of the balance of the bill goes to the credit card company
> (b&stards - what the f**k do they do for their 2.5% ?!)

Summary: it is a VAT scam.

A lot of shops do this, M&S started it some 3 years ago. The point is that
they are claiming that the 2.5% is for financial services; since financial
services do NOT attract VAT they can keep the entire 2.5%, whereas they
have to give the government 17.5% of the rest. This may not sound like a
lot, but 17.5% of 2.5% on lots of transaction == big money.

The way that I look at it is:

* They charge 2.5% less for the item if you pay by CC (since they keep
the entire amount the same). This strikes me as illegal since they
effectively charge more for the item if you pay by cash/cheque.
* I don't like this since they end up paying less tax - this increases
my tax bill -- since Gordon B has to get the money from somewhere.

I *always* cross that bit out (it says something like 'I agree ...')
and tell them that they need to account for VAT on the entire transaction.


A couple of weeks ago (when doing my VAT return) it occured to me that on goods
bought like this that I could only claim 97.5% of the VAT. I checked with
customs & excise (or whatever they are called these days) and was told to
claim the full amount. I was then told that the practice has been declared
illegal in the high court & that the businesses would have to pay the govt
all their illegally ill gotten games of the last few years.

Ie: the scam will soon stop.

--
Alain Williams
Parliament Hill Computers Ltd.
Linux Consultant - Mail systems, Web sites, Networking, Programmer, IT Lecturer.
+44 (0) 787 668 0256 http://www.phcomp.co.uk/

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