- Original Poster
- #1
Hi, I’d be most grateful if anyone can share insight into the below scenario:
I purchase a retailer gift card with a face value of £100 from an intermediary. I get a 5% discount off the face value.
The retailer in question has a composite VAT rate of 8% on its gift cards as agreed with HMRC.
The intermediary provides a full VAT invoice for the purchase, showing that the £95 price is inclusive of VAT at 8%.
• I claim the input VAT for the gift card as shown on the invoice.
I then visit the specific retailer’s website and purchase an item costing £100 inclusive of VAT. I use the gift card referenced above to pay for the item.
The item is standard rated for VAT. The retailer provides a full VAT invoice for the purchase showing that the £100 price is inclusive of VAT at 20%.
• I claim the input VAT for the item as shown on the invoice.
Is the above scenario allowed or disallowed by VAT rules?
I couldn’t find anything that related to my specific query when researching online. All the info I found just related to the VAT treatment of gift cards in and of themselves. So I’d greatly appreciate any advice.
Thanks
I purchase a retailer gift card with a face value of £100 from an intermediary. I get a 5% discount off the face value.
The retailer in question has a composite VAT rate of 8% on its gift cards as agreed with HMRC.
The intermediary provides a full VAT invoice for the purchase, showing that the £95 price is inclusive of VAT at 8%.
• I claim the input VAT for the gift card as shown on the invoice.
I then visit the specific retailer’s website and purchase an item costing £100 inclusive of VAT. I use the gift card referenced above to pay for the item.
The item is standard rated for VAT. The retailer provides a full VAT invoice for the purchase showing that the £100 price is inclusive of VAT at 20%.
• I claim the input VAT for the item as shown on the invoice.
Is the above scenario allowed or disallowed by VAT rules?
I couldn’t find anything that related to my specific query when researching online. All the info I found just related to the VAT treatment of gift cards in and of themselves. So I’d greatly appreciate any advice.
Thanks
