Please note that we cannot give VAT advice to you but we can explain how we charge VAT and also share our understanding of what this means for you. You should check with your accountant how to account for it in your particular case.
Our fees, being the Monthly and Agreement Fees but excluding the credit charge, are standard rated items and so we add VAT to them at the standard rate which is 20% at the moment. The credit charge is exempt from VAT and so no VAT is added to this.
If you use Standard Accounting for VAT you will account for this in the normal way and will account for VAT on the full amount of your sales when you make the sale. If you use Cash Accounting, then you will account for VAT when you receive the money grossed up by the amount of the credit charge. If you use other accounting schemes you should refer to your accountant for advice.