I have a client (Ltd Company, VAT registered) who regularly purchases a widget (standard-rated), works with it and then sells onto a customer at a mark-up.
She has since told me that she can now buy these widgets through her friend, who has one of these employee perk accounts through their job. Like a RewardGateway or such, with shop discounts. The way it would work is she pays, say, £50 for £60 of credit at Amazon, which can then be used to buy these widgets.
The discount is worth quite a lot to her, but it does not feel right to me, namely:
- Buying the widget through her friend, even though she uses her own bank card, paperwork won't be in her name, but in her friends
- Tracking presumably the gift card she is essentially purchasing
- Losing the VAT through the fact it's a gift card, which I think is not necessarily single purpose, as the widget is being bought from Amazon meaning that despite the saving, the VAT is not recoverable as it's lost at the point of purchasing the gift card
- Her friend most probably breaching her perk and risking getting found out given the volumes
I asked her whether she could bulk buy, or whether she could identify the company providing the benefit, but I don't think so.
It doesn't taste right to me at all, but I'm keen to see if there are any thoughts. The only other idea was whether her friend bought and sold the widgets, maybe registered for VAT, but again probably the friend breaching her terms and it again just seems to stink as an idea.