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VAT for giftcards
When should I pay VAT?
VAT on gift cards should be charged at the redemption of the gift card.
Why?
Simply put, if you are selling gift vouchers, they can be claimed for things from your shop or venue that are at different VAT rates.
How do I report on this ?
Your gift card products should be setup with 0% VAT . Then you can report on the sale as you normally would when the code is redeemed.
Example :
A customer buys a £30 Voucher. The £30 voucher sold would be sold excluding VAT (0% VAT on the gift voucher product) . The customer then buys £50 worth of products and uses the gift card. So when it is redeemed, the full £50 bill is considered for VAT.
Warning
Booknow do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
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