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If you are a retail or distribution business that engages in the buying, selling or redemption of vouchers then read on to see how this change could affect your business.
Previously the legislation made a distinction between credit vouchers, retailer vouchers and certain other types of voucher and single-purpose vouchers. This new legislation only refers to single-purpose vouchers and multi-purpose vouchers.
There is no longer a supply of a voucher – instead, a voucher represents the goods or services to which it relates.
With these new changes, many more vouchers will become ‘Single Purpose’ vouchers. This means that those issuing the vouchers, must account for VAT at an earlier date than before and will no longer be able to reap the benefits of non-redemption of vouchers. In addition to this, the value of the VAT that is to be accounted, will be different and intermediaries selling certain vouchers won’t be able to make a supply of the voucher anymore.
We recommend that you check HMRC’s guidance. They provide additional detail and a number of examples of how the new rules will operate (including how they will affect intermediaries).
If however, you are still unsure of the impact on your business, then please don’t hesitate to get in touch.
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