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VAT on Face value vouchers/part of package

What is the correct treatment?

Joe Bloggs - VAT registered - is planning to sell packages online containing some of his own services, and including vouchers that can be spent at various outlets within 3 months. Here's what I think should happen, having looked at VAT notice 700/7 - 8.12:

1. He declares VAT on all sales of packages. 2. Customer presents vouchers to separate retailer for whole or part of transaction. 3. VAT registered retailer will declare VAT on the total value of their service as with any other sale. 4. VAT registered retailer will ask Joe to reimburse them for the voucher face value. For both the retailer and Joe this is a supply for no consideration, and does NOT come within the scope of VAT. By this method HMRC are not losing out as the voucher is a cash replacement only.
BUT do you agree with me?


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