Treasury wins appeal in Debenhams VAT case

London’s Court of Appeal ruled yesterday that High Street chain Debenhams
will now have to pay VAT on the handling fee paid by credit and debit card
customers – providing a £300m boost to government coffers.

The earlier ruling said Debenhams only had to pay VAT on only 97.5% of the
cost of items sold, but Customs & Excise has always contended that the 2.5%
handling fee charged by the store and about 70 other retailers should not be
exempt from VAT.

Earlier reports have said the case could possibly end up at the European
Court of Justice.

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