The ICAEW has responded to HMRC’s consultation on transposing the EU vouchers directive into UK VAT law, issued on 1 December 2017. The ICAEW makes a number of points in its response, including:
concern that ‘it will not always be clear to those redeeming vouchers whether they are redeeming a single purpose voucher (SPV) or a multi-purpose voucher (MPV). Consequently, there is a risk of double taxation where a voucher is treated as an SPV on purchase and an MPV on redemption. There is a similar risk of non-taxation where a voucher is treated as an MPV on purchase and an SPV on redemption’;
it is ‘crucial to correctly identify whether a voucher is treated as a SPV or MPV at the time of purchase and for this treatment to be capable of confirmation by the eventual redeemer’;
concern that ‘output VAT may be accounted for on a greater value when redeeming an MPV than the total consideration received by the supplier for the underlying supply of the redeemed goods or services’.
We understand that draft legislation will be published in Summer 2018 and introduced in a subsequent Finance Bill.
The ICAEW has responded to HMRC’s consultation on transposing the EU vouchers directive into UK VAT law, issued on 1 December 2017. The ICAEW makes a number of points in its response, including:
concern that ‘it will not always be clear to those redeeming vouchers whether they are redeeming a single purpose voucher (SPV) or a multi-purpose voucher (MPV). Consequently, there is a risk of double taxation where a voucher is treated as an SPV on purchase and an MPV on redemption. There is a similar risk of non-taxation where a voucher is treated as an MPV on purchase and an SPV on redemption’;
it is ‘crucial to correctly identify whether a voucher is treated as a SPV or MPV at the time of purchase and for this treatment to be capable of confirmation by the eventual redeemer’;
concern that ‘output VAT may be accounted for on a greater value when redeeming an MPV than the total consideration received by the supplier for the underlying supply of the redeemed goods or services’.
We understand that draft legislation will be published in Summer 2018 and introduced in a subsequent Finance Bill.
