Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hello, I am Keith, one of the experts on Just answer, and pleased to be able to help you with your question.
For the purpose of this answer I have assumed that you are registered for VAT. If you are not, please advise.
The fee of 3.5% which you are charged has VAT added. This VAT is an input and should be reclaimed on your quarterly return in the normal manner.
I do hope that I have resolved your conundrum for you.