Value Added Tax (VAT) and card reader fees are distinct charges that are applied in different sequences. VAT is generally applied to the base price of a product or service, before any payment processing fees, such as card reader fees, are added. This means that the VAT is calculated on the initial price that the consumer sees and agrees to pay for the product or service itself.
The card reader fees, on the other hand, are typically incurred by the business using the card reader service and are applied to the total transaction after VAT has been included. These fees are charged as a percentage of the transaction, including VAT, essentially making them an additional cost to the merchant rather than the customer. Consequently, the customer pays VAT on the price of the product, while the merchant absorbs the card reader fees.
Thus, the chronological sequence is: 1) the initial price of the product, 2) VAT applied to this price, and 3) card reader fees applied to the total transaction value (including VAT) that the merchant is subsequently charged.