Loose change

Nature of supply of voucher in exchange for coins

The taxpayer operated kiosks in supermarkets. Customers fed loose change into the machine and in return received a cash voucher based on 90.1 pence of every £1 which could be exchanged at the supermarket. Under a separate agreement the taxpayer was obliged to pay the supermarket the face value of the vouchers presented to it and a share of the commission. The coins inserted into the kiosk were collected by third parties who reconciled the amounts with the taxpayer’s internal accounts and deposited the coins into its bank accounts.

In 2000 HMRC told the taxpayer that these arrangements were exempt financial services but in July 2015 it stated the supply was one of taxable coin-counting services.

The First-tier Tribunal allowed the taxpayer’s appeal. It agreed the taxpayer had made an exempt financial supply within VATA 1994 ...