Business promotion schemes ― coupons

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note covers the VAT implications of issuing or redeeming of coupons.

See the Business promotion schemes ― overview guidance note for details of the other types of business promotion schemes that can be used.

For more in depth commentary, see De Voil Indirect Tax Service V6.169.

What are money-off coupons?

Coupons are normally issued in order to give a customer a discount off a future purchase and are often referred to as discount vouchers. The decision in Boots confirmed that money-off coupons are not to be treated as consideration when used to buy other goods but are simply evidence of entitlement to a discount.

Coupons can be issued in a number of ways, including (this list is not exhaustive):

•
when a product is purchased
•
by purchasing goods of a certain value
•
email or other electronic means
•
via the post
•
via magazines or newspapers

The coupons can be issued either by the retailer or the manufacturer.

What is the VAT treatment of the sale and

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