I have a client who has just set up receiving payment via Paypal, but to offset the costs has agreed to charge clients 4% to pay via this method (they are mainly a business to business). I understand that the paypal fees are VAT exempt, but would he have to charge an additional 20% on the fee? We have only had one so far for about £5. Also would they need to invoice this, the customer has just paid the extra, the fee is noted on the bottom of the invoice.
They are on the flat rate scheme if that makes any difference.
Hi it's just further consideration, so yes to Vat. Can be vat inclusive of course if they so wish. Needs to be mentioned on the vat invoice. Vat guide covers this scenario
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thanks thats what I thought. They have not done anything. I will have a chat and treat this as vat inclusive, it's not worth bothering the client for an extra £1.
