The ECJ (European Court of Justice) has provided its judgement in the cases concerning the VAT liability of card handling charged for the NEC and Bookit (part of the Odeon Group).
The ECJ has acknowledged that while the activities of NEC and Bookit, including preparation and submission of the settlement file, were essential for the transfer of monies to occur, they fell short of the services required to meet the VAT exemption.
This decision is likely to have an impact on those who are charging credit and debit card handling charges and who are treating these as exempt. HMRC will be looking at those businesses which have treated separate charges as exempt from VAT and could look to assess for an underpayment of VAT for the last four years.
I would recommend anyone who is relying on VAT exemption for similar payment processing services to review their position.