Value Added Tax Act 1994 Schedule 10B paragraphs 4–5

Single purpose vouchers: special rules

Schedule 10B paragraphs 4–5 define what makes a voucher a single purpose voucher and set out the VAT treatment when such a voucher is redeemed.

• A voucher is a single purpose voucher if, at the time of issue, the place of supply is known and the goods or services it covers all fall within a single VAT rate category (standard, reduced, zero-rated, or exempt/non-taxable)
• The supply to consider is the actual provision of goods or services the voucher can be used to buy, not the supply deemed to occur when the voucher itself is issued or transferred
• When a single purpose voucher is redeemed, the actual handing over of the goods or services is not treated as a separate supply for VAT purposes, because VAT was already accounted for at the point the voucher was issued or transferred
• However, if the person who provides the goods or services on redemption is not the person who originally issued the voucher, the provider is treated as making a supply to the issuer, ensuring that VAT is correctly accounted for along the supply chain

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