VAT and business promotion schemes: how will the latest developments impact you?

December 18, 2015


Following a recent court case decision on VAT and business promotion schemes it makes it clear that, where a business buys its vouchers directly from retailers and uses them in a business promotion scheme, it will have no entitlement to recover input VAT and no obligation to account for output VAT. But where the business acquires the vouchers from an intermediary in a chain of supply, under current UK law the intermediary must account for VAT and the acquiring business should be able to recover it. What does your business do currently?

The position is less clear for the first intermediary in a chain of supply, by HMRC concession, intermediaries currently receive recovery of 'input VAT'. What about where there is a cross border transaction? Where is the place of supply for VAT? Will there be double taxation? Or multiple VAT registrations required?

How do you account for VAT on vouchers in your business? In light of this case do you need to review your business promotion schemes now?

Please get in touch with me or Jim Wilkinson, our Indirect Tax Retail Lead Partner, if you would like to discuss this case further.


Jim Wilkinson

e: [email protected]

p: 0113 289 4276


Christine O'Malley

e: [email protected]

p: +44 (0)16 124 52429