In Silverdoor Ltd v HMRC [2024] UKUT 147 (TCC) (23 May 2024) the Upper Tribunal (UT) held that a credit card fee passed through to clients was ancillary to a wider reservation service and was therefore subject to VAT. It also held that the card payment facility did not in any case satisfy the conditions of the exemption for financial intermediaries.
The taxpayer (Silverdoor) provided services to short-term accommodation providers (referred to as property partners). The services took the form of advertising accommodation making reservations and collecting payments. The accommodation was generally booked by businesses (the clients) for their employees. Silverdoor acted as a disclosed agent to the property partners and was remunerated via a commission which was charged to those partners.
Silverdoor made no charge to the clients for services except where the client chose to pay for the reservation with a corporate credit card. In these circumstances...
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