The puzzle of the new VAT voucher rules

New voucher rules will be imposed from 1 January 2019, with the view of harmonising the VAT treatment of vouchers across the member states. The rules seek to define a voucher, including the difference between a single-purpose voucher (SPV) and a multi-purpose voucher (MPV), and tax these at different points (issue, transfer, redemption), depending on what is being supplied. There are some potential nuances in the draft UK legislation that may create potential new difficulties in the treatment of vouchers; and, despite the aim of harmonisation, differences from the rules in other member states. These include the additional (transferability) condition imposed on the definition of a voucher, the definition of an SPV being wider than that of the EU legislation, and proposed input tax restrictions in relation to the issue or transfer of an MPV. The new rules may be something of a puzzle for those affected.