How do I Add a Credit Card Charge?
Contents
Summary
Credit Card Charges are governed by complicated rules regarding the VAT element of the charge.
Please click here to see HMRC's latest advice (see Section 4.7).
More Information
Strictly speaking you will need to create 4 different part numbers for Credit Card Charges. Each code should have a different default VAT Rate set: 'No Default Set', 'Zero Rate', 'Exempt' and, if applicable, 'Rate 4'. This is necessary because the Credit Card Charge should follow the rate or rates applicable to the items being sold as per HMRC advice.
When the charge is passed to the customer you will need to calculate the charge and use the appropriate code or codes to allocate the charge across the appropriate VAT Rates based on the items you have sold.
In practice you may prefer to use one code which has a VAT Rate set to 'No Default Set'. In most instances VAT will then be charged at 20%. Please consult your accountant for advice.
Creating the Stock Codes
Follow the the instructions in the Creating a Stock Item article to create up to 4 codes.
- Assign a suitable Stock Group to the item/s.
- Ask your accounts department for a Sales Centre to assign to the Stock Code.
- Assign the appropriate VAT rate to the item.
- Click on the [Invoicing] tab.
- Set the "Update quantity?" flag to 'No'.
Adding the charge to a sale
When the sale is ready to be paid you will need to calculate the amount to charge. This should be added the the final invoice using the Stock Code/s you have created.
- Add the appropriate Credit Card Charge Stock Codes to the invoice.
- If you are in " Stock Control\Counter Operations Point of Sale" the price you enter will be the total charge at the VAT Rate specified. The system will work out the VAT element of the charge for you.
- If you are in any other invoicing option enter the price to charge on the "Unit Price" field and press <F2> to work out the Nett Unit price. VAT will be added at the appropriate rate.
See also
