Pub landlord challenges treatment of credit card fees

Businessman Ed Armstrong, landlord of a London bar and restaurant, has launched a funding campaign on Crowdjustice to raise £30,000 to support a legal challenge to the VAT treatment of merchant service commission. This is the fee levied on retailers on card payments taken through British tills by merchant acquirers. 

HMRC treats the fee as exempt, making it non-recoverable for VAT-registered businesses. If the charge were taxable, businesses would be able recover it because they charge VAT to the final consumer. In the Netherlands, the charge is subject to VAT.

Mr Armstrong has succeeded in pushing his case to appeal. Lawyer on the case, Peter Mason, said: ‘No one has challenged this recently, but case law says merchant acquiring is similar to factoring, which the courts have said is VATable.’

Crowdjustice: tinyurl.com/crjuccc