The Upper Tribunal heard an appeal by Findmypast of the First-Tier Tribunals decision to reject the their claim for repayment of VAT which had been incorrectly accounted for on unredeemed vouchers purchased for accessing certain features on their website. Findmypast is a genealogical website that allows visitors to search historical records for free, however further services provided by this website, including viewing and downloading these records, attract a charge. 

This charge can be paid either by subscription for a fixed period or on a pay-as-you-go (PAYG) basis. By utilising this second payment method, a number of credits (or vouchers) are provided in return for a lump sum and are then used up each time records are viewed-downloaded. These credits are only valid for a fixed time before expiration. The basis of the appeal is that Findmypast disagree with both HMRC's and the First-Tier Tribunals decision to reject a repayment of VAT that was declared previously on unredeemed vouchers used by PAYG customers. 

This appeal was made on the grounds that, as the credits remained unused, no taxable supply had taken place and therefore no VAT was due. The First-Tier Tribunal asserted that in return for payment, the customers were receiving a ‘package' that granted a right to access the records held on the website and therefore VAT was due at the outset of the granting of this package as opposed to when the credits had been used up. This view was rejected by the Upper Tribunal as to the value of credits remaining represented a limit to which the services of the website could be utilised despite the fact that the customer did not know the value up to which the services would be provided. 

For this reason the appeal by the taxpayer was successful. The VAT treatment of vouchers and similar is complex.  If you or your clients are involved in the issue of vouchers then please contact one of our experienced consultant in order to discuss the VAT implications thereof.