To accept is not to agree

During 2002 and 2003 Boots plc ran five sales promotions where a customer who spent £15 received a £5 voucher for money off certain goods.

The company accounted for VAT under the bespoke retail scheme but this did not take account of the face value of the coupon.

When the coupon was later redeemed by a customer the consideration on that purchase was reduced for VAT purposes by the £5 credit given in respect of the coupon.

Customs’ policy relating to vouchers is contained in VAT notice 727/4 paragraph 7.18 which states that if a voucher is included with other products for a single charge this is treated as a multiple supply.

VAT is only due on the part of the payment relating to the goods and the amount of the payment relating to the voucher should be omitted from the daily gross...