When should I pay VAT?
VAT on gift cards should be charged at the redemption of the gift card.
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.
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.