Vouchers ― VAT treatment from 1 January 2019

Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Vouchers ― VAT treatment from 1 January 2019
  • Background
  • UK VAT treatment
  • The changes
  • What is the definition of a voucher?
  • Single-purpose voucher (SPV)
  • Multi-purpose vouchers (MPV)
  • Place of supply
  • Consideration
  • Intermediaries
  • More...

Vouchers ― VAT treatment from 1 January 2019

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note deals with the VAT treatment of vouchers with effect from 1 January 2019. See the Coupons and vouchers guidance note for more information on the VAT treatment of vouchers before this date.

For information on other business promotion schemes, see the Coupons and vouchers and Cash backs and loyalty schemes guidance notes.


The EU Commission issued a proposal for Council Directive (COM (2012) 206) on the VAT treatment of vouchers. A copy of the relevant proposal can be accessed via the following link:

HMRC Notice 700/7; De Voil Indirect Tax Service V3.167; VATA 1994, Sch 10A

A press release was also issued by the EU commission regarding the new Directive.

The Commission has also issued the VAT rules on vouchers approved by Council press release.

The new Directive has now been enacted and is according to the Commission intended to reduce the risk of mismatches in national tax rules leading to double taxation, non-taxation or other undesirable consequences. This can happen where a voucher is issued in one EU member state and used in another, and particularly where vouchers are traded. A summary of the changes announced is provided below.

The consultation and amendments to the VAT treatment follow a significant number of cases involving payment using vouchers which have been referred to the CJEU.

A summary of the main changes implemented by the Commission is below.

The term ‘voucher’ means an instrument where there is an obligation to accept it as consideration or part consideration for

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