VAT on vouchers

On 10 May 2012 HM Treasury added a new clause to Finance Bill 2012 which radically changes the UK’s VAT treatment of face value vouchers (FVVs). To properly understand these changes one must first understand some key background points.

Vouchers are a big deal

There may be some confusion as to what vouchers are and therefore quite how significant an issue this is. The industry most affected is telecoms but FVVs could include vouchers issued by retailers online vouchers high street vouchers tokens prepaid phone cards gift vouchers and book vouchers. Consumers in the UK...