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News - tax cases

08 January 2007
Categories: Tax cases
Total UK Ltd v CRC; R v Hashash; Turpeinen (Case C-520/04)

Vouchers and VAT

Total UK Ltd introduced a customer loyalty scheme TOPS in 1991. Customers became registered cardholders and collected five points for every litre of fuel purchased. After collecting 5 000 points these could be exchanged for a £5 gift voucher which could be used in high street stores. The taxpayer said that the amounts on which it was due to pay output tax should be reduced by the amounts equal to the cost it incurred in purchasing the vouchers.
The VAT tribunal disagreed saying that the £5 vouchers were not a reduction in the price paid by the customer. The taxpayer appealed.
The High Court ruled that the taxpayer's purchase of the gift vouchers was clearly part of a chain where the VAT supply was a supply of goods by the retailer and the transfer of the voucher was part of the...

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