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UK businesses call on Government to axe the 'card tax'

UK businesses call on Government to axe the 'card tax'

Trade bodies representing more than 240,000 businesses have have called on the UK government to axe a "£5bn stealth tax" by card payment giants, claiming it is crippling British firms.

The Axe the Card Tax campaign - with trade bodies including the British Retail Consortium, the Federation of Small Businesses, the Retail Charity Association, the British Independent Retailers Association and the Association of Convenience Stores - claims UK businesses are losing £5bn every year to the major card schemes, with the pandemic accelerating the trend towards cashless payments.

For every payment made on card, the retailers are charged a Merchant Services Fee, comprising interchange Fees, Acquirer Net Revenue and Scheme Processing Fees. Merchants says that Scheme and Processing Fees have been increased by 600% since 2014.

The major card schemes are already facing an investigation by regulators into their decision to impose additional charges on UK companies accepting card from the EU. The British Retail Consortium estimates that this price hike will cost an additional £36.5 million a year.

Martin McTague, national chair of the Federation of Small Businesses, states: “We know that card fees are a significant burden for small businesses, but their impact is often hidden. These charges are often confusing and lacking in transparency, pushing up costs for businesses and consumers alike. There’s a strong case for the Payment Systems Regulator to intervene, to help level the playing field for small firms.”

The Axe the Card Tax campaign is asking the Government to create a more level playing field that offers businesses the opportunity to use cheaper alternative providers as the cost of doing business crisis intensifies.

The inititiative piles furthe pressure on the card schemes which are already facing a class action lawsuit over fees charged to businesses for corporate credit cards. Mastercard is also facing a £14 billion class action suit on behalf of consumers brought by the former head of the UK Financial Ombudsman Service Walter Merricks.

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 October, 2022, 11:23Be the first to give this comment the thumbs up 0 likes

While they're at it, they should call on government to ban interest on loan. Interest cost is no less crippling on small businesses than MDR / MSC.