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Posted Sat, 07 Nov 2020 12:45:36 GMT by Helen Campbell
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
Posted Thu, 19 Nov 2020 10:40:01 GMT by Helen Campbell
Please can you provide guidance on this - thank you
Posted Thu, 19 Nov 2020 13:58:45 GMT by Trevor Steel
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.
Posted Fri, 20 Nov 2020 15:15:32 GMT by HMRC Admin 5
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,
Posted Fri, 20 Nov 2020 15:29:01 GMT by Trevor Steel
Note that section 8 applies to vouchers issued before 1/1/2019. Vouchers issued since then are covered by section 9.
Posted Thu, 03 Dec 2020 10:56:22 GMT by Helen Campbell
Thank you Trevor

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