Launched late last year, the new card allows holders to deduct VAT from purchases for business use without having to account for every single transaction with an individual invoice. The card's introduction follows a seven-month pilot programme observed by Customs & Excise which has accepted that the card meets VAT legal requirements in the UK.
More than 300 companies in the USA have been using the American Express Purchasing Card for the last two years, while in the UK, companies like Rank Xerox and Dupont Conoco were involved in the trial.
At the moment, cardholders have to establish their own arrangements with their suppliers to use the card with American Express simply facilitating the transactions. Potentially however, users could make arrangements with fuel companies to purchase petrol or diesel on the card, and receive VAT-deducted consolidated monthly accounts with the benefit of comprehensive management reporting facilities.
Other key features of the card include: transaction information, individual limits for each card, and automatic computerised posting of monthly electronic invoice. Customs & Excise granted no major concessions to American Express before agreeing that the system met all the criteria it required for VAT purposes.