What does 'relevant goods or services' mean under Schedule 10B paragraph 2 of the Value Added Tax Act 1994?

Under Schedule 10B paragraph 2, 'relevant goods or services' means any goods or services that can be obtained by using a particular voucher as payment. For example, if a gift card can be used to buy clothing from a specific retailer, those clothing items are the relevant goods or services for that voucher.

What is the difference between a voucher transfer and a voucher redemption for VAT purposes?

A transfer means passing a voucher from one person to another, such as a distributor selling a gift card to a retailer. Redemption is the act of using the voucher as payment for goods or services at the point of sale. This distinction matters because VAT may be charged differently at each stage depending on voucher type.

Does a voucher need to cover the full price for the VAT voucher rules to apply?

No. Schedule 10B paragraph 2 confirms that where a voucher is offered or accepted as consideration for goods or services, this includes situations where the voucher covers only part of the total price. For example, using a £20 voucher towards a £50 purchase still counts as the voucher being accepted as consideration.

Why are the definitions in Schedule 10B paragraph 2 important for United Kingdom VAT?

These definitions determine which voucher transactions are treated as supplies for VAT purposes and at what point VAT becomes chargeable. They ensure consistent treatment across different voucher scenarios, whether the voucher covers full or partial payment, and distinguish taxable transfer events from redemption events.

Value Added Tax Act 1994 Schedule 10B paragraph 2

Meaning of related expressions

Schedule 10B paragraph 2 defines key terms and expressions used throughout the Schedule relating to the VAT treatment of vouchers.

"Relevant goods or services" means any goods or services for which a voucher can be used as payment.
A "transfer" of a voucher refers only to passing the voucher from one party to another — it does not include the act of redeeming the voucher for goods or services.
Where the Schedule refers to a voucher being offered or accepted as payment, this includes situations where the voucher covers only part of the total price.
These definitions are important because they determine which transactions are treated as supplies for VAT purposes and at what point VAT becomes chargeable.

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