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HMRC internal manual

VAT Time of supply

Actual tax points: payments: credit cards, charge cards and the like

Similar principles apply to payments by credit card or charge card as they do to cheque payments (see VATTOS5145). In other words payment is not strictly received until the sum involved is paid over to the supplier by the card company.(For VAT purposes the amount of the payment to be treated as received is the gross transaction amount before deduction of any commission charges retained by the card company.) As with cheques, a supplier may be permitted to treat the date of acceptance of the card as the payment tax point where this conforms to the normal accounting practice of the business - provided there is no unreasonable delay in processing the transaction. This should not be allowed in cases where the card company with holds payment pending satisfactory delivery of goods which can occur with mail order transactions.