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New VAT rules for some vouchers

Different timing. If you issue vouchers to your customers which they can exchange for goods or services, you need to know about the new VAT rules which took effect for vouchers issued on or after 1 January 2019. Since then the date VAT is triggered depends on what the voucher entitles your customer to.

Two types of voucher. Under the new rules vouchers fall into two categories: single purpose and multi-purpose. For single purpose vouchers VAT is triggered when you supply a voucher. For multi-purpose vouchers the VAT is triggered when the customer redeems it. Note. The new rules don’t apply to discount vouchers

(see: https://www.gov.uk/government/publications/changes-to-the-vat-treatment-of-vouchers/vat-treatment-of-vouchers-from-1-january-2019 )


Single purpose. Where the precise nature of the supply is known at the time the voucher is issued, it’s a single purpose voucher. For example, a beauty salon sells a customer a voucher which can only be used in exchange for a manicure.

Multi-purpose. A voucher is multi-purpose if either the persons obliged to accept a voucher, or the goods or services for which it can be used as payment, are stated in its terms of use; and the voucher can, but doesn’t have to be, transferred as a gift. For example, an Amazon gift voucher.

The point at which VAT is triggered now depends on whether the precise nature of goods or services it can be exchanged for are known at the time you supply it. If they are known you must account for VAT when you supply the voucher, if not you account for VAT when it’s redeemed.

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