VAT on gift cards

Our client buys multipurpose gift cards from a retailer and sells these on. How should the gift card sales and purchases be treated on the VAT return - are these treated as 0% or out of scope. Thanks

Please can you provide guidance on this - thank you

My understanding is that such transactions are outside the scope of VAT. Schedule 10B, paragraph 7(2) of the VAT Act reads: "The paragraph 3 supply made on the issue or subsequent transfer of a multi-purpose voucher is to be treated as not being a supply within section 26(2)." The following guidance may also be useful: https://www.gov.uk/government/publications/changes-to-the-vat-treatment-of-vouchers/vat-treatment-of-vouchers-from-1-january-2019 In particular it points out that intermediaries will be unable to reclaim VAT incurred in the course of this activity, as they are not making a taxable supply.

Hello Helen. For guidance on gift cards, I invite you to read Section 8 of VAT Notice 700/7: Business Promotions and VAT

Thank You,

Note that section 8 applies to vouchers issued before 1/1/2019. Vouchers issued since then are covered by section 9.

Thank you Trevor