HMRC has responded quickly to the Lebara phone cards judgment. The proposed change will potentially affect all single-purpose face-value vouchers.
On 3 May the CJEU issued its judgment in the long awaited Lebara phone cards VAT case (Case C-520/10).
In brief the court concluded that when Lebara issues a phone card to a third party distributor it makes only one supply. HMRC had taken the view that Lebara in fact made two supplies – one to the distributor at the time of issue and one to the end user when the phone card was redeemed. This judgment means that the UK's law is incompatible with the VAT Directive and requires amendment.
On 10 May...
