Tax man targets small agents first in credit card claw back

Tax man targets small agents first in credit card claw back

The tax man is targeting small agencies as it makes a retrospective grab for unpaid tax on credit card charges over the past four years.

As feared, agents are now receiving tax demands for thousands of pounds following an appeal court decision involving Axa UK and dental services firm Denplan (Travel Weekly, March 8).

One independent shop owner was said to have been sent a bill for £6,000 from Her Majesty’s Revenue & Customs (HMRC).

Damon Wright, director of VAT services at industry accountancy firm MacIntyre Hudson, said: “This really seems to have picked up steam now.

“HMRC is going after all the smaller agents first, who don’t necessarily have the wherewithal to fight it, to see how much they can collect before one of the big guys says ‘we’re not having that’.

“I’ve not heard of any of the really big agency organisations or OTAs being contacted.”

Abta issued guidance last month stating the issue was relevant only for members acting as agents who charge customers a ‘standalone’ fee for credit card usage.

The association says it disagrees with HMRC’s treatment of standalone fees and, it is understood, an appeal is being brought by the NEC exhibition centre in Birmingham.

However, agents have been told they have little option but to pay the demand and appeal. They can’t appeal unless they pay, Wright said.

Another option is for agents to claim hardship, said Wright, who added he is in informal talks with consortia on advice for members.

HMRC is calculating the amount of VAT agents are said to owe for each quarter since 2007.

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