The Exchequer Secretary to the Treasury (Mr David Gauke)
I am announcing a change in legislation to protect public finances and prevent tax avoidance. This follows a decision of the Court Justice of the EU which affects the way in which the UK treats certain face value vouchers for VAT.
It is the Government’s intention to introduce legislation as part of the Finance Bill 2012 that will have effect from the date of the announcement. This will align domestic legislation with the relevant EU directive and, additionally, protect revenue and guard against potential artificial avoidance of VAT through the use of face value vouchers.
Although the legislation will apply from 10 May, any VAT due arising from its operation will not become payable until after Royal Assent of the Finance Bill 2012. Until then, suppliers may continue to account for VAT under the current rules.
HMRC have today published a statement on their website explaining the change, together with a technical document containing draft legislation which the Government intend to include in the current Finance Bill by way of amendment. Copies of the documents will be deposited in the Libraries of both Houses.