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HMRC internal manual

Business Income Manual

Check traders: background information

The business of a check trader consists of selling checks which the purchaser uses to buy goods at specified shops; the checks can be used as soon as they are issued, but the purchaser pays for them over a period of 20 or 21 weeks. A service charge (or poundage), normally 5%, is also payable. The check trader settles with the shopkeeper for purchases on his checks and is allowed an agreed discount. The instalment payments for the checks are normally collected by personal calls by agents who are paid by commission at a specified rate (usually 7½%) on the amounts collected.