Value Added Tax Act 1994 Schedule 10A paragraph 4

Treatment of retailer vouchers

Paragraph 4 of Schedule 10A defines what a retailer voucher is and sets out how VAT applies when such a voucher is issued, used, or subsequently supplied.

• A retailer voucher is a face-value voucher issued by a business that itself supplies goods or services obtainable with the voucher, and which undertakes to reimburse (in full or in part) any other suppliers who accept it.
• When a retailer voucher is issued, the amount paid for it is ignored for VAT purposes — unless the price paid exceeds the face value, in which case only the excess is brought into account.
• This disregard does not apply where the voucher is used to obtain goods or services from a supplier other than the issuer, and that other supplier fails to account for the VAT due on the supply to the voucher holder.
• Any onward sale of a retailer voucher after its original issue is treated in the same way as the supply of a credit voucher under paragraph 6 of the Schedule.