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Where Taxpayers and Advisers Meet

Payment methods and discounts

Nonimous
Posts:90
Joined:Thu Jul 16, 2009 12:39 pm
Payment methods and discounts

Postby Nonimous » Thu Feb 01, 2018 6:19 pm

rather an odd one

A is doing some marketing with B and setting up a website. B has a business involving payment methods for tourists visiting the UK, a bit like having a prepaid Credit card

So far so simple. A is providing a VATable service to B. We don't act for B

However, B is charging commission and when more than a certain amount is spent, the customer is refunded part of the commission by A. A has the details because A runs the signup website

A is not doing anything for the tourists. If anything, A is making a third party supply on the instruction of B.

I tend to think, therefore, that A's VAT liability is purely on what it charges A and it does not need to worry about the tourists as it is not supplying anything

les35
Posts:635
Joined:Wed Aug 06, 2008 3:09 pm

Re: Payment methods and discounts

Postby les35 » Mon Feb 05, 2018 12:21 pm

I agree. A's service is taxable marketing.
If I understand it correctly, B's service involves processing of payments, which is exempt, so he may be partially exempt. This is probably why he does not want A to charge VAT. He simply needs to make sure his margins are adequate.


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