Service was not within financial services exemption

The taxpayer acted for providers of short-term rentals of accommodation such as hotels and serviced apartments. It advertised the properties and also handled reservations including the payment of fees by the guests for their chosen accommodation. It charged a commission to the accommodation providers for its services. However if a guest paid by a corporate card they were charged a fee equal to 2.95% of the accommodation value as merchant acquirers made an extra charge to the taxpayer for this amount.

The taxpayer claimed that the fees charged to guests were outside the scope of VAT as a disbursement because money went directly from the guest to the bank. The taxpayer did not hold store or transmit any credit card data which was all held by the banks. It described the charge as a ‘card fee amount’ on the paperwork issued to the guests;...