RCB/12/12 VAT—Changes to the treatment of supplies made in connection with single purpose face value vouchers following the CJEU Judgment in Case C-520/10
Revenue & Customs Brief, Issue 12. 10 May 2012
This Brief sets out changes to the VAT rules for certain types of face value vouchers as announced today by David Gauke, the Exchequer Secretary, in a Written Ministerial Statement. These changes will be included within the current Finance Bill and will have retrospective effect to 10 May 2012.
Who needs to read this?
Businesses involved in the sale of single purpose face value vouchers (see paragraph 1.4 below) or which provide goods or services in exchange for such vouchers. Other types of voucher are unaffected by the changes.
Lebara Limited operated a telecommunications business by which international telephone calls were made available to customers in other member states through the use of face value vouchers. Lebara sold the vouchers to distributors in other member states who then sold them on to other distributors or direct to the end customers. The case before the CJEU concerned the proper analysis of the supplies involved and how such services provided via vouchers should be taxed.
The Court found that, in circumstances such as these, there was a supply of services from Lebara to the distributors, but there was no supply by Lebara on redemption to the end customer. As a consequence, the UK legislation in VATA 1994 Sch 10A for certain types of voucher is incompatible with EU law.
Although this case