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Are Golf Club Members Cards Single Use Vouchers?

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As with a lot of golf clubs, in my club members are required to credit their cards with the club for a set amount, say £50 at the beginning of the year and that entitles them to a 10% discount on any future bar purchases. The £50 is depleted during the year as purchases are made and further top ups can be made up at any time.

Some advice has been sought on whether the crediting of the card should be treated as a Single Purpose Voucher with output VAT being due on receipt of the £50 by the club and they are waiting on an answer but I have also been asked for an opinion.

From VAT 700/7 Para 9.2 it states under "What is not a Voucher" that neither vouchers which are not transferrable nor discount vouchers are considered to be vouchers. I would consider that both of these apply to the Golf Club Card.

Does anyone have any experience of how the money credited to these cards should be treated?

Replies (19)

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RLI
By lionofludesch
01st Jul 2020 17:21

I vote yes.

On the grounds that the single use is buying alcohol.

Now, if the member could also buy coaching provided by the club professional, which might be exempt, maybe not.

There's a lot of ifs in there, obviously, none of which seem relevant anyway.

Imho, the accounting would be a lot easier with an SUV.

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Replying to lionofludesch:
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By Mr_awol
01st Jul 2020 17:29

lionofludesch wrote:

Imho, the accounting would be a lot easier with an SUV.

Depends.

If they let non members, tour groups, members guests, or a whole host of other riff-raff in then they are likely to also need a cash bar. IDepending on whether they have a modern till, two tills, etc it could get complicated.

I suppose you could account for VAT on all till sales and then knock off the members' card redemptions which had already been paid. It's still hassle though which doesn't arise if/when dealing with multi purpose vouchers

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Replying to Mr_awol:
RLI
By lionofludesch
01st Jul 2020 17:36

Mr_awol wrote:

lionofludesch wrote:

Imho, the accounting would be a lot easier with an SUV.

Depends.

If they let non members, tour groups, members guests, or a whole host of other riff-raff in then they are likely to also need a cash bar. IDepending on whether they have a modern till, two tills, etc it could get complicated.

I suppose you could account for VAT on all till sales and then knock off the members' card redemptions which had already been paid. It's still hassle though which doesn't arise if/when dealing with multi purpose vouchers

I'm not seeing that as being easier than following the cash. Member pays £50, there's VAT at that point. Simpuls.

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Replying to lionofludesch:
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By Mr_awol
01st Jul 2020 21:59

The difficulty is if you have a till that you’re using for your VAT Returns that will assume there is VAT at point of sale - but VAT will have already been paid on the vouchers.

So you either don’t use the till records, or you remove the duplicated sales. If everyone had to use a prepayment card you wouldn’t have to do that - but there are bound to be guests, functions, people from reciprocal clubs, etc etc etc

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By Mr_awol
01st Jul 2020 17:23

I know it never will be, but are the balances technically returnable?

My local club doesn't actually have a way of checking what the balances are on any one card - so if you lose it, then the money is gone. As such id imagine the VAT is payable when you top up.

If the vouchers are on a more sophisticated system and are essentially monies held on account that 'could' be requested back (like a prepaid debit card system) then perhaps the VAT might be payable at the point of purchase of beer, rum or even a glass of white wine if it's a the second Wednesday of the month (when they let ladies in).

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By Mallock
02nd Jul 2020 07:57

The club can tell what balance is on the card at anytime but if the initial money (£50) is not used up by the end of the year, it is taken as a deemed donation to the club. Any top ups over the £50 are carried forward to the next year.

So is the consensus that these cards are definitely single purpose vouchers even though they confer a 10% discount and cannot be transferred which are two of the conditions for them not to be considered to be vouchers?

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Replying to Mallock:
RLI
By lionofludesch
02nd Jul 2020 08:53

Well now you tell us, late in the day, that they are multiple purpose. You can buy alcohol at the bar or it can be a donation.

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Replying to Mallock:
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By Mr_awol
02nd Jul 2020 10:47

lionofludesch wrote:

Well now you tell us, late in the day, that they are multiple purpose. You can buy alcohol at the bar or it can be a donation.

I'm not sure if the deemed donation makes them multi-purpose, or whether in fact this just counts and any expiry/breaking of the voucher.

Mallock wrote:

So is the consensus that these cards are definitely single purpose vouchers even though they confer a 10% discount and cannot be transferred which are two of the conditions for them not to be considered to be vouchers?

I don't think the members discount at the bar makes much difference. I don't see these as 'discount vouchers' which I would consider to be like the £10 off next purchase voucher you sometimes receive when spending £100 at Argos (or, if you're down with the kids, Superdry).

The transferrable (or not) element is more interesting.

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By WorkingFromHome
02nd Jul 2020 15:08

Having worked with tills like these in restaurants, the till systems way of treating this would be to account for the whole sale of goods, and the payment as cash received (in whichever form of cash/card/members card) and would show the difference as discounts.

E.g - pint of lager £3, payment £2.70, members discount £0.30

So the sale of goods always stays at total cost of goods, so VAT applicable on the total cost?

The card top up in itself isn't the sale. The sale isn't made until goods are purchased.

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Replying to WorkingFromHome:
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By WorkingFromHome
02nd Jul 2020 15:10

Accounting treatment,
Credit sales £3
Debit bank/cash £2.70
Debit discounts allowed £0.30

VAT would be on the total sales

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Replying to WorkingFromHome:
RLI
By lionofludesch
02nd Jul 2020 15:14

WorkingFromHome wrote:

Accounting treatment,
Credit sales £3
Debit bank/cash £2.70
Debit discounts allowed £0.30

VAT would be on the total sales

On £3 ?

I reckon £2.70.

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Replying to WorkingFromHome:
RLI
By lionofludesch
02nd Jul 2020 15:13

WorkingFromHome wrote:

The card top up in itself isn't the sale. The sale isn't made until goods are purchased.

But when is the tax point ?

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Replying to lionofludesch:
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By Mallock
02nd Jul 2020 16:32

lionofludesch wrote:

WorkingFromHome wrote:

The card top up in itself isn't the sale. The sale isn't made until goods are purchased.

But when is the tax point ?

If these are vouchers then the tax point is the date of money being credited to the card.
I have talked to a few other members in different clubs who are on Committee etc and I think it's fair to say that not many of them have even considered the voucher issue: almost all are treating the money credited to the card as a deposit by the member with no VAT consequences and are accounting for output VAT on the sale when drinks or food are purchased.

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Replying to Mallock:
RLI
By lionofludesch
02nd Jul 2020 16:54

Mallock wrote:

If these are vouchers then the tax point is the date of money being credited to the card.

I agreed with that until I found out that the money could be a donation.

Quote:

I have talked to a few other members in different clubs who are on Committee etc and I think it's fair to say that not many of them have even considered the voucher issue: almost all are treating the money credited to the card as a deposit by the member with no VAT consequences and are accounting for output VAT on the sale when drinks or food are purchased.

I'd go with that. In fact, I'd probably go with whatever was easier with the till records and argue the single purpose/multi purpose issue if HMRC ever bothered to ask. I'd be quite confident of winning either argument. Mainly on the grounds that there's not much at stake and I'd expect them to cave in.

Just out of interest, if any money is treated as a donation, what happens to the VAT ? If paid on receipt, is a credit claimed for the VAT on the portion not spent ? If not, why not ?

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Replying to lionofludesch:
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By Mr_awol
02nd Jul 2020 16:55

If it a voucher, then there is no VAT relief just because it doesn't get spent. That's really the whole reason this is important (otherwise it's a timing issue that would be less than twelve months and not too many people would care that much about)

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Replying to Mr_awol:
RLI
By lionofludesch
02nd Jul 2020 17:18

Mr_awol wrote:

If it a voucher, then there is no VAT relief just because it doesn't get spent. That's really the whole reason this is important (otherwise it's a timing issue that would be less than twelve months and not too many people would care that much about)

On the other hand, what sort of golfer doesn't spend at least £50 a year on drinks?

One who died shortly after his initial £50 deposit ?

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Replying to Mallock:
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By Mr_awol
02nd Jul 2020 16:53

I agree that's how I believe most will be treating them. As long as the cards don't fulfil the 'voucher' test they're probably right. The answer to that seems to hinge on transferability.

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RLI
By lionofludesch
02nd Jul 2020 17:15

I'm not convinced that they're vouchers at all. It's more likely that it's a deposit of £50 to spend on drinks at the bar. Effectively a bank account.

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Replying to lionofludesch:
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By legerman
02nd Jul 2020 18:51

lionofludesch wrote:

I'm not convinced that they're vouchers at all. It's more likely that it's a deposit of £50 to spend on drinks at the bar. Effectively a bank account.

That's my understanding as well, you can add to the card at any time and funds are deducted at the point of sale for the discounted price of the beer.

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