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The Merchant Charges Debate

 
John Ward Head of Retail VAT Ernst & Young LLP asks where the merchant charges debate will all end
 
Everyone by now must have read the door and pay-point notices in the vast majority of High Street retailers confirming the arrangements for those who choose to pay by debit and credit cards. These notices together with the terms which customers are supposed to read and agree to on signing the payment slip create a contract that supports the VAT mitigation arrangement which is commonly known as Merchant Charges.
 
The effect of that arrangement is that the supply of goods or services by the retailer to the customer is discounted by an average of 2.5% and the customer receives a further supply of payment services from a...
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