A: The sale of this type of voucher will not attract VAT. This is because it is a “multi-purpose voucher” that can be used to buy goods and/or services at different VAT liabilities (both zero-rated books and standard-rated café items in this case). When the voucher is redeemed by a customer, you must account for VAT at that time based on what is bought with it. If a book is bought this is a zero-rated supply and so no VAT to account for when redeemed but if used for a café meal then this is a standard-rated supply and so 20% VAT will need to be accounted for. The value of the sale is based on the face value of the voucher unless you, the redeemer, know (and can show) that the voucher was last sold for a different amount, in which case that different amount is used. Notice 700/7 para 9 and para 9.5 in particular covers multi-purpose vouchers in detail.
These publications from Markel Tax were correct at the time of going to press and should be considered as principles-based guidance only. To check current validity, call the Markel Tax helpline. ICAEW (as distributor) disclaims all liability for any errors or omissions.
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