VAT on vouchers

On 10 May 2012 HMRC introduced a new provision to be included in Finance Bill 2012. The UK rules for face value vouchers (FVVs) are contained in VATA 1994 Sch 10A and distinguish between FVVs which are ‘credit’ vouchers and ‘retailer’ vouchers, stamps and other FVVs. The tax point (under Sch 10A) for credit and retailer vouchers was when the FVVs were redeemed. The new legislation distinguishes (with immediate effect) between FVVs which are ‘single purpose vouchers’ (where VAT is charged on issue) and ‘multi-purpose vouchers’ which largely follow the old rules.