3
(1)
This paragraph applies to a face-value voucher issued by a person who—
(a)
is not a person from whom goods or services may be obtained by the use of the voucher, and
(b)
undertakes to give complete or partial reimbursement to any such person from whom goods or services are so obtained.
Such a voucher is referred to in this Schedule as a “credit voucher”.
(2)
The consideration for any supply of a credit voucher shall be disregarded for the purposes of this Act except to the extent (if any) that it exceeds the face value of the voucher.
(3)
Sub-paragraph (2) above does not apply if any of the persons from whom goods or services are obtained by the use of the voucher fails to account for any of the
VAT due on the supply of those goods or services to the person using the voucher to obtain them.
(4)
The Treasury may by order specify other circumstances in which sub-paragraph (2) above does not apply.
Cases considering Schedule 10A, paragraph 3 4
[2006] EWCA Civ 29 · 27 January 2006Limits
The credit-voucher provisions were read subject to the obligation to tax telecommunications services and avoid non-taxation and double taxation. Different national collection methods could not make the cross-border supply chain VAT-free. (see paras [112]–[114]; [137]–[140])
The phonecards were credit vouchers because their issuer was different from the persons providing the services on redemption. That classification made the credit-voucher disregard and its disapplication applicable. (see paras [5]; [12]; [123])
The disregard of consideration for credit vouchers was not universal. It was subject to an enlarged disapplication where its operation would cause non-taxation, contrary to the Sixth Directive, of a taxable UK supply. (see paras [99]; [113]–[114]; [137])
The disapplication was widened to cover cases where the disregard would produce non-taxation, contrary to the Sixth Directive’s objectives, of a taxable UK supply. Precise inserted words were unnecessary. The wider treatment of defaults by ultimate suppliers or failures by other states was left open. (see paras [113]–[115])
[2009] EWHC 1077 (Ch) · 20 May 2009Limits
The provision defines a credit voucher by reference to the issuer’s inability to supply the goods or services and undertaking to reimburse the supplier. The classification depends on the issuer, not the person who supplies the voucher to the end-user. (see paras [13]; [16])
The provision disregards consideration for a credit voucher except where it exceeds face value. The judgment applies the broader anti-non-taxation approach identified in IDT to the voucher scheme. (see paras [13]; [20]-[21])
The provision was interpreted in IDT as removing the disregard where otherwise necessary to prevent non-taxation of a taxable supply. The judgment treats that approach as part of the binding principles relevant to the present case. (see paras [20]-[22])
[2004] EWHC 3188 (Admin) · 21 December 2004Interprets
The court held that “person” referred to legally independent persons, not taxable persons or members of an overseas VAT group. ICSIL and Interdirect therefore remained separate persons for the voucher classification. (see paras [63]-[66])
The provision was treated as the disregarding rule for credit vouchers. It remained applicable because the Irish supply was not a supply on which United Kingdom VAT was due under the Sixth Directive. (see paras [24]; [58])
“VAT due” had to be assessed after determining the place of supply under article 9 of the Sixth Directive. The paragraph could not be construed as referring to VAT due elsewhere in the European Union. (see paras [52]; [58])
What each judgment says about Schedule 10A, paragraph 3 is in the case-law panel in the full Act.