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A dispute between the taxpayer company and HMRC concerned the VAT treatment of charges invoiced by the claimant to its customers when they chose certain methods of settling their monthly bills, e.g. by debit or credit card, via the telephone or internet, or over the counter at a bank or post office.
The claimant charged an additional £3 where payments were made in this way, which it described as a ‘separate payment handling charge’.
The High Court referred to the European Court of Justice asking whether these additional charges constituted consideration for a supply of payment handling services, separate from the supply of telecommunications services.
The court ruled that the additional charges were not consideration for a supply of services independent from the principal supply.
