Up, up and away

The taxpayer company provided hot-air balloon rides and sold merchandise including mugs t-shirts and binoculars. It also sold vouchers which were redeemed for flights or goods.

The monetary value did not appear on the voucher but was established by entering the voucher’s code number in to the firm’s computer.

It was possible to use a voucher to buy more than one item: for example a balloon flight (standard rated for VAT) and a child’s t-shirt (zero rated).

The company concluded VAT was chargeable when the vouchers were redeemed although it had been accounting for VAT when the dockets were sold.

The First-tier Tribunal said the appeal centred on the correct interpretations of “face value” and “single purpose”.

It was clear in this instance that the vouchers were face value and entitled the customer to buy the services or goods up to the cash value of...