⚠️ Important: This article is for guidance only - we always recommend speaking to an accountant to confirm how these rules apply to your specific business.
When it comes to VAT in the UK there are two types that all gift cards fall into, you can work that out based on what the gift card can be used for within your business.
Single-Purpose Vouchers (SPV)
A SPV can only be redeemed for goods or services that all fall under a single VAT rate. A spa voucher for treatments or a gift card for a single product or service are common examples.
VAT is charged when the gift card is sold as you can determine the final VAT rate to apply. No further VAT is applied when the voucher is redeemed.
Multi-Purpose Vouchers (MPV)
A MPV can be spent across a range of goods or services that may attract different VAT rates. No VAT is charged when the card is purchased. The VAT should be calculated and applied at the point of redemption, based on what the customer actually purchases.
Where discounts apply
When the purchase is discounted either partially or entirely, VAT is only apoplicable on the amount paid after the discount is applied.
📚 Note: Glu does not breakdown or show VAT on gift card order receipts. A customer purchasing on behalf of a business might get in contact requesting a VAT receipt. VAT is a matter for your own business to manage in line with HMRC guidelines and the voucher type you operate.