Commentary

BB/18/06 VAT—liability of agents' credit and debit card handling services

Part V16 Forms and other HMRC material

BB/18/06 VAT—liability of agents' credit and debit card handling services

BB/18/06 VAT—liability of agents' credit and debit card handling services

Business Brief, Issue 18. 30 October 2006

This Business Brief article announces HMRC's revised policy on the VAT liability of credit and debit card handling services supplied by agents, following the end of litigation in the cases of Bookit Ltd (Bookit) and Scottish Exhibition Centre Ltd (SEC).

It replaces item 2 of Business Brief 21/05 and item 1 of Business Brief 17/98, both of which are now withdrawn. Public Notice 701/49 “Finance” (Part V8) will be updated in due course.

Summary

The House of Lords has refused HMRC's petition to appeal the Court of Appeal judgment in Bookit (EWCA Civ 550) [2006] STC 1367 and HMRC will not be seeking leave to appeal the judgment of the Court of Session in the case of SEC ([2006] Scot CS CSIH-42).

The effect of the end of litigation in these two cases is that debit and credit card handling services provided by agents are VAT exempt where a key identified component is present in the service.

Claims held pending the outcome of these cases will now be reviewed for payment and any assessments raised by HMRC for under-declared tax will be withdrawn where appropriate.

Background

The Bookit case concerned the supply of Odeon cinema tickets. Customers wishing to purchase cinema tickets remotely, eg by phone or Internet, were redirected to Odeon's agent, Bookit, who charged the customer an additional fee over and above the price of the ticket for their

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