Policy paper

VAT treatment of vouchers

This measure is about the implementation of an EU directive on the VAT treatment of vouchers.

Documents

Draft legislation

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Explanatory note

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Details

The government’s objective is to make sure that the amounts customers pay when using vouchers to obtain goods or services is better reflected in the tax base. It also wants to make improvements for business by modernising and harmonising the VAT treatment of vouchers.

It aims to do this by providing new, clear rules which separate vouchers with a single purpose (for example, a traditional book token) from the more complex gift vouchers and set out how and when VAT should be accounted for in each case.

The new legislation is not concerned with the scope of VAT and whether VAT is due, but with the question of when VAT is due and - in the case of multi-purpose vouchers - the consideration upon which any VAT is payable.

A consultation with a summary of responses about VAT and vouchers is also available.

Published 6 July 2018