Changes to VAT legislation on face value vouchers

VAT Information Sheet 09/18


This explains the key changes to the UK voucher rules that apply from 1 January 2019. These are:

  • A voucher will represent the goods or services to which it relates, a supply that will either be taxed at the time of issue and each subsequent transfer of ownership of the voucher (if it is a SPV), or only when the voucher is redeemed (if it is a MPV).
  • The concepts of credit and retailer vouchers will disappear. Vouchers will be MPV or SPV.
  • The issue and transfer of MPVs will not be supplies that carry the right to input tax deduction.
  • The value on redemption of a MPV will be the amount paid for the most recent transfer of the voucher, and where this is unknown, it will be the face value.
  • Where one person issues a SPV and another redeems it there is no actual supply on redemption but there will be a deemed supply of the goods or services by the redeemer to the issuer.

From January 2019 a voucher will be defined as an instrument that must meet three conditions. These are:

  • One or more persons must be under an obligation to accept the voucher as payment/part payment for goods/services.
  • The voucher must be transferable by gift.
  • The goods/services and/or the persons obliged to accept the voucher as payment for them are limited and stated on/recorded in the voucher or its terms and conditions.


Tickets, stamps, discount vouchers, software access codes and electronic money are not vouchers.

The definition of SPV will be wider than at present. A SPV will be a voucher where the place of supply of the underlying goods or services is known and these all have a single VAT rate (even if they are different types of goods/services). The key difference between SPV and MPV will be that with a SPV everything needed to account for the right amount of VAT is known up front (on issue and transfer), while with a MPV this will only be known on redemption.

The Appendix contains useful examples of different situations and how they will be taxed. Part of the paragraph about vouchers used as part payment that was in the earlier draft is not in final published version. To access the Information Sheet, click here.


These changes to the voucher rules should simplify and harmonise the rules. However, some complexities and differences from EU law will remain. Key areas of difficulty are likely to be input tax deduction where MPVs are issued and transferred; the valuation of MPVs on redemption where different amounts from face value have been paid down the supply chain; and the deemed supply by the redeemer of a SPV to the issuer. Issuers, redeemers and intermediaries (including businesses using vouchers as rewards/incentives for customers or staff, or as part of salary sacrifice schemes) should make sure they are clear about the new rules.