Single Use Vouchers
Following the ECJ case of Lebara Ltd, HMRC have announced changes to the VAT treatment of “single purpose face value vouchers”. These are vouchers which can only be used to purchase one type of goods or service, such as pre-paid phone cards and group purchase vouchers.
VAT is now due at the time of issue of the voucher (and on any subsequent sales of the vouchers.) There is no change to the treatment of face value vouchers that can be used to buy more than one type of goods or service – where the VAT is due at the time of redemption of the voucher.
The VAT treatment of vouchers and business promotion schemes can be complex so contact us if you would like to discuss further.