VAT on gift vouchers and offers

[jonnytabpni]

Hi folks,

We are currently developing ePOS software and have a few questions regarding VAT.

1) Gift Cards

As far as we understand, when our ePOS software tops up a gift card (for e.g. £10), the customers does not pay any VAT on it.

But when it is redeamed for an item (e.g. for £7), the customer is liable to pay the correct VAT rate for that item, and any further items bought using the giftcard.

This effectly means we just treat the gift card as a standard tender type. Is this correct?

2) Money off coupons given away free

What happens here? Similar to Gift Cards?

3) Offers
Lets says the retailer wants to have a 3 for 2 mix and match offer at christmas, how would our till account for VAT on those items? What if it was BOGOF?

I have looked at the HMRC's website however I'm not accountant and I really can't understand it (sorry)

Your help is appreciated

Thanks

 

[winelight]

Does this help:

http://www.hmrc.gov.uk/vat/managing/charging/discounts-etc.htm

 

[jonnytabpni]

Thats the page I was reading for it's confusing me.

The Face Value and Money Off coupons thing sounds the same to me. And what is "combined price" for BOGOF offers?

I'm sorry but that page just confused me

Cheers

 

[jonnytabpni]

Thats the page I was reading but it's confusing me.

The Face Value and Money Off coupons thing sounds the same to me. And what is "combined price" for BOGOF offers?

I'm sorry but that page just confused me

Cheers

 

[winelight]

Money Off is like 5p off a bottle of vodka.

Face Value is like this voucher is worth £5. Rather like a £5 note.

The combined price is the price you pay for however many things it is you buy. So if you buy 3-for-2 of something that costs £2 each then the combined price is £4 (that is, you pay £4 for 3).

I agree it could be better explained.

Please let me know if there's anything else on that page that isn't clear.

 

[jonnytabpni]

Thanks,


How would i calculate the VAT rate if a 3 for 2 offer had mixed items.

Let's say someone buys 2 Pens and a book at £2 each.

The total would come to £4.

What would the VAT rate be? Could i use this crazy sum:

Divide £2 (the discount) by 3 = 66p
Then, minus 66p from the price of each item, then go ahead with the transaction as normal? Would this work? Maybe there is a better way to do it to account for rounding errors...

Thanks,

Jonny

 

[winelight]

What that page could do with is some examples, I suppose.

Sorry but I don't know the answer to your question. It can be found here:

http://customs.hmrc.gov.uk/channels...cument&columns=1&id=HMCE_CL_001596#P648_52231