VAT and vouchers
VAT and vouchers

The following Tax practice note provides comprehensive and up to date legal information covering:

  • VAT and vouchers
  • Background
  • What is a voucher?
  • General rule
  • Composite transactions
  • Single purpose vouchers
  • Definition
  • Tax point
  • Single purpose vouchers issued before 1 January 2019
  • Likely impact of change of definition of single purpose voucher
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for Tax?


On 27 June 2016, the Council of the European Union passed specific rules for the value added tax (VAT) treatment of vouchers in the form of Council Directive 2016/1065 (Vouchers Directive (EU) 2016/1065). Vouchers Directive (EU) 2016/1065 amends the provisions of Council Directive 2006/112/EC. The aim of the rules is to ensure consistency and uniform VAT treatment of vouchers between Member States. The rules apply to vouchers issued after 31 December 2018. Prior to this date, there was no EU-wide definition of a voucher and certain cross border voucher transactions were not taxed or were subject to double taxation.

Following a consultation by HMRC that ran from 1 December 2017 to 23 February 2018, Finance Act 2019 (FA 2019) transposed the Vouchers Directive (EU) 2016/1065 into UK law for vouchers issued on and after 1 January 2019. The provisions are contained in

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