Q: Do you know if all companies who receive alot of payments via credit card are able to do set up a system to stop paying charges on charges? If so how does one go about this? Presumably via Customs and Excise.
Sep 27 2005
Answered by: Clive Lewis Ask a question
I recently had a receipt from Homebase and on it it says words the the effect, ' I agree to pay 2.5% of the amount if the invoice to the homebase card Handling Services Ltd for its provision of payment processing services to me. The balance of 97.5% is payable to Homebase Ltd for the goods. The total amount payable remains the same.' This is presumable a way of preventing paying charges onto charges. Do you know if all companies who receive alot of payments via credit card are able to do set up a similar system to stop paying these charges on charges? If so how does one go about this? Presumably via Customs and Excise.
Earlier in 2005 HM Revenue & Customs won an appeal case in the Court of Appeal against Debenhams on this subject. The case is complex but basically the Court of Appeal decided that there is no separate contract between the retailer’s (in this case Debenhams) customers and the card handling company. It is estimated that 70 other retailers are using this scheme.
The House of Lords Appeals Committee has recently declined to hear the Debenhams appeal. This is the end of this case for Debenhams. In future retailers will be unable to draw a distinction between the proportion of the sale attributable to the card handling company.
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