Sales of Retail Gift Vouchers

Sales of Retail Gift Vouchers

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I've asked this question before but didn't get any answers!!! Can someone please tell me what the correct VAT & Accounts treatment is of sales & redemption of Retail Gift Vouchers that are only redeemable with the issuer?
Ken Bunce

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By AnonymousUser
28th Jun 2007 18:57

What happens on expiry...
If the voucher has an expiry date, does a tax point occur for VAT when it expires?

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By User deleted
25th Jun 2007 12:10

One opinion .....
To set the ball rolling - came across this issue when integrating an Epos system with Sage Line 50. The matter is similar to a Payment On Account (POA) where payment has been received but not allocated to goods

One of the potential issues with Sage Line 50 is that the app requires a VAT code to be entered when entering a Payment On Account; however at the time the business receives the payment the money has not been used to pay for any actual goods so the VAT status is not known. This is where Sage possibly falls down because once it has insisted on a VAT code at the point of entry, if the subsequent sale (allocation) incurs a different VAT code you have a problem ....

Having spoken to HMRC a number of years ago their advice was:
- at the time of the sale you cannot assign any VAT to the sale because at that point it is not known
- the VAT charge only arises on a subsequent allocation of the POA (either partially or fully) to goods/services

So at the point of initial voucher sale it would seem as though no VAT arises. VAT then only arises when monies received are allocated to goods

However, others may know differently .......

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