New Executive Board
Newly Elected Members
Existing Members
Gareth Batten – M&S
Tim Ward – John Lewis
Stuart Lawrence – B&Q
Arun Glendinning – CashStar
Tony Rich - Halfords
Kevin Lake - Countdown
Siobhan Moore – Locke Lord
Wayne Harrington – Edenred
Steve Bradbery - SVS
Names in purple are Issuer Members, Black are Service Members
Thanks to Out Going Exec Members:
• Denise Porter – TreatMe
• Bill Alexander – Red Letter Days
• Diane Jackson – CPI Card Group
• John Bohan – M&S
The New
Membership Year
Andrew Johnson
Current Status
Total Membership: 78
39 Issuer Members
39 Service Members
In 2006 – 56 members total
In 2011 – 72 members total
At the last meeting members agreed that membership
criteria was centred on ‘gifting’ either person to person or
company gifting. Scope of membership to be revisited
each year by the exec to take into account industry
2014 Plan: Update
Progress To Date
UKGCVA becomes
Thought Leader, Trend
Developer & Voice of the •
Learning Opportunities
Overseas Partnerships
Next Steps from Member
Scope of PR extended through
More ‘thought leader’ articles
Continued research, e.g. B2B
Hub of Innovation website has not
been progressed
Dedicated workshops difficult to
organise due to conflicts of interest
Guest speakers at meetings or panel
Relationships with IMA and PIF
UKGCVA is fully supportive of the
opening of an Irish Association
Social events not well attended
Meetings very well attended
Build on good PR
Investigate further research
Proactive with speaking opportunities
Develop meetings over the next year to
continue to add value rather than
developing further events
Potential for meetings to be sponsored
to secure speakers and be clear who
the sponsor is – to be discussed by
new exec
Work to launch the Irish Association
either as stand alone or as partnership
association with UKGCVA
Continue relationship with PIF and IMA
No further alliances planned as per
member feedback
Develop meetings further
No further social events
2014 Plan: Update
Progress To Date
Next Steps from Member
Formalising Best
Practice & Industry
Project groups meet as necessary
No recording of formal best practice
has taken place
Research & Market
EY data continues to be developed
Research project for this year is
focused on B2B
PR using adhoc, informal research
for PR purposes
Organise project groups as necessary
– VAT & Emoney
Plan for recording best practice
EY contract up for renewal early 2013;
opportunities for further enhancement
B2B research is supported by 24
members, value of further research to
be discussed
Negative Media
• Retailer administration continue to
give rise to negative PR
• Interviews and articles always come
back to breakage!
Answering the Questions:
• Breakage is a reality, there is no benefit in
ignoring it!
• The true figure is difficult to get; it varies
store to store; retailers v leisure etc. – 6%
is an average
• Do we need to make a more accurate
assessment with members?
• We talk about the positives – spending
within 3 to 6 months, additional spend so
retailers do want gift cards and vouchers to
be spent
• These questions are not going away!
• Liaison with regulators has become increasingly important
• Association partners with PWC for VAT and Locke Lord for
• Also direct relationships with relevant personnel at HM Treasury,
FSA and the EU
• Working groups to be established for VAT and EMD, potential for
these groups to meet with regulators (EMD 2011 met with HMT and FSA
on several occasions)
• Your own internal relations with regulators should be encouraged
• Some member companies may employ dedicated people to liaise
with government departments
• Regulators liaise with trade associations as they can be seen to
be communicating with the whole industry and not favour any
particular company
• Liaison with regulators will be top of our agenda in 2012/13
2011 Sales Review
Q1 Sales 2012
Total Sales Increases
Total Sales Increases
Q1 2012 up 3.8% on
Q1 2011
Sales reported by UKGCVA
Q1 Breakdowns
Consumer v B2B
Comparisons to Q1 2011
• Similar mix to Q1 2011
• Consumer up 1.4%
• B2B up 5.7%
• Agents up 19.5%
• Retail sales flat
• Slight decline in leisure
Q1 % of Sales
Paper v Plastic
Comparisons to Q1 2011
• Closed Loop cards up 11.8%
• Vouchers down 12.2%
Market Opportunities
Voucher market continues to out perform the wider economy
Q1 indicates a slow down on the increases experienced in 2011
Digital gifting continues to be the hot topic
Social gifting firmly on the agenda
These new channels indicate new customers rather than
Robust marketing plan for gift cards and gift vouchers essential for
Desirability of cards and vouchers as a gift continues but fighting
against continued discounting on merchandise
Consumer market is seeing little competition from general purpose
prepaid – at the moment
Close eye on legislation and the media
What Christmas
Means to Me
Holly Tyzack
Rostrum PR
Andrew Johnson
What Christmas Means to Me
National Design Competition for Gift Cards, Gift Vouchers & eVouchers by Children
Children aged 7 to 12 years invited to design a gift card, gift voucher or
eVoucher based on their own understanding of Christmas
Regional entries and winners
Potential for winning entry to be printed and sold
• Raise the profile of gift cards, vouchers & e; particularly amongst
• Encourage children to add gift cards/vouchers to their Santa List
• Promote CSR for UKGCVA and members
• Focus on helping children with financial education, teaching
children how to look after money and understand the value of gifts
• Create regional and national competition aimed at schools, afterschools clubs, youth clubs and other children's organisations
• Profile UKGCVA as a thought leader and expert in retail press plus
wider press including teaching, parenting and financial
• Members to leverage additional press opportunities by featuring in
internal newsletters and client communication
Opportunity for PR when the competition is launched and then when winning entries are announced
• Dedicated pages on UKGCVA website created with all information
and how to enter
• Press launch of competition, possibly at a retail outlet
• Judging panel created to include members, potential for children's
celebrity and teachers
• Regional finals with press opportunities
• Potential for the winning design to be sold by a member(s)
• Winner receives gift cards worth £500 & potential for winner to be
offered a days internship at a retailer
• Runners Up prizes to be agreed
PR Targets
Press &
Blogs & Forums
Your Involvement
Your Support
Support with prizes
Potential to host a launch or results
Potential to sell the winning entry
Promotion in your own media and
customer communication
Contribution to costs
What you get
Part of a national campaign
Potential for local and national CSR – the
‘big’ community
Corporate PR
Your brand featured on competition web
• Budget of £10,000 for operations (prize fund separate)
• If all members contribute that’s £130 per member
• May not appeal to all members, anticipated 50% of members may support, so
£260 from 40 members
• Option for additional support to host events in different regions perhaps in
stores or at head offices (additional local publicity)
• Option for larger financial contribution for specific members
• All members asked to contribute to prize fund
Next Steps
Launch, 4th September
Closing date, 10th October
Judging, 15th October
Winners announced, 12th November
Exec Board like it! Do you?
Would you like to be involved?
• Any Questions?
Business to Business
Market Research
24 companies have signed up to the project
Still chance to join
Research interviews start in 2 weeks
Results presented in September
Data exclusive to participants until March 2013
If you have yet to submit your client list please
send tomorrow!
Emoney &
The Threat of Regulation on
Closed Loop Cards
Siobhan Moore
Locke Lord
E-money & the threat of regulating closed
loop gift cards
Siobhan Moore
UKGCVA Members Meeting June 2012
Why should you care?
• E-money Directive 2009/110/EC
updated existing e-money regulations
prudential regime brought into line with PSD
• Payment Services Directive 2007/64
established a modern and comprehensive set of rules applicable to all payment
services in the EU.
Continual monitoring
• FSA established Payment Services and Emoney Stakeholder Liaison Group
in association with HM Treasury
trade associations represented
discuss implementation PSD and 2EMD
opportunity to raise concerns
learn about other initiatives from European Commission
meetings held quarterly
What are the concerns?
• Stakeholder perspective:
Regulations not yet implemented in some Member States i.e. Belgium, Spain,
France, Cyprus, Poland and Portugal
Interpretation of regulations differ between Member States
Application of rules to differs between authorised entities i.e. e-money institution
vs credit institution on safeguarding funds, passporting
Grey areas e.g. limited network exemption. Gives rise to differing interpretation
between Member States
What are the concerns?
• FSA / HMT perspective:
Can capital requirements be simplified?
Should the PSD and 2EMD be brought under the same legal regime?
Should new types of services be brought into scope i.e. overlay payment
services and new types of billing services?
Limited network exemption – disparity between regulated and unregulated
programmes. Could a lighter touch regime be introduced for providers of those
activities that are currently exempt?
Is the current definition of e-money out of date?
UKGCVA responded to FSA and HMT
regarding the PSD and 2EMD Review
24 April 2012
supports the review of PSD and 2EMD
supports alignment of PSD and 2EMD
does not support HMT’s suggestion to ban
products issued under simplified due diligence
supports clarification of limited network
supports steps by the FSA and HMT to make
passporting process smoother and quicker
supports steps by the FSA and HMT to align
the view of the role of agents and distributors
between Member States
What next?
− FSA and HMT to publish next
steps on PSD and 2EMD review
− Consultation 2EMD due Nov 2012
− EC issued a Green Paper on
card, internet and mobile
payments. EC to announce the
next steps Q2 2012. Any future
legislative or non-legislative
proposal will be accompanied by
an extensive impact assessment
− UKGCVA to reconvene
Regulatory Working Group
Siobhan Moore
Senior Associate – Cards and
Tel.: +44 20 7861 9021
Mob: +44 7824 821 268
Email : [email protected]
Second Floor
201 Bishopsgate
London EC2M 3AB
Jim Wilkinson
Martin Blanche
Taxation of vouchers
Jim Wilkinson
Martin Blanche
UK Gift Card
& Voucher
20 June 2012
On the agenda
 Voucher Proposal
 Why a proposal on vouchers
 Proposal’s changes –Main areas
 Definition
 VAT treatment
 Taxable amount
 Lebara case
 Overview of case
 HMRC reaction
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Voucher Proposal
UK Gift Card & Voucher Association
© PwC 2012
20 June2012
Why a proposal on vouchers?
• Main problems identified
- A lack of clear common EU VAT rules
- Enormous growth in type of vouchers, increased functionality,
convergence with payment instruments, cross-border and chain
- Insufficient practical guidance deriving from CJEU rulings
- Different approaches by Member States (patch-work of guidance)
- Situation of double or non taxation
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Why a proposal on vouchers?
Objectives of the proposal:
• Clear common EU VAT rules on vouchers
- Create legal certainty and avoid situations of double or non taxation
• Certainty on definition and VAT treatment of vouchers
- Avoid distortions of competition between new forms of vouchers
and the classic means of payment
• Tax neutrality
- Remove barriers to cross-border business development
• Lower compliance costs
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Why a proposal on vouchers?
Proposed timing:
• New legislation and administrative guidance to be adopted and
published by the Member States on 1 January 2014
• Application of new Directive as from 1 January 2015
 Timing still feasible?
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Proposal’s changes –Main areas
Changes to VAT Directive 2006/112/EC in 3 main areas:
• Definition and classification of vouchers for VAT purposes
• General VAT treatment of these vouchers including distribution and
redemption services
• Taxable amount
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Definition and classification of vouchers for VAT
The concept of ‘voucher’
• Key features
- Carrying a right
- To receive a supply of goods or services or a price discount or
rebate with regard to a supply of goods or services
- A corresponding obligation to fulfil this right by the issuer
- May be in electronic or physical form
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Definition and classification of vouchers for VAT
Discount voucher
- “A voucher carrying a right to receive a price discount or rebate
with regard to a supply of goods or services”
› E.g. - Coupons attached to a product in the supermarket
- Coupons in newspapers or to be downloaded from
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Definition and classification of vouchers for VAT
Paid vouchers
- Single purpose voucher (SPV):
◦ “An instrument carrying a right to receive a supply of goods or
services where the supplier’s identity, the place of supply and the
applicable VAT rate for these goods or services known at the
time of issue of the voucher”
› E.g. Pre-paid card only to be used for telephone calls
- Multi purpose voucher (MPV):
◦ “Any voucher, other than a discount or rebate voucher, which
does not constitute a SPV”
› E.g. Gift card which can be used to buy goods from a department
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Point of taxation SPV
• SPV is always considered as a payment on account, thus taxation
upon receipt of the payment and on the amount received
• No derogation from this principle allowed for Member States “where
payments are made against a voucher” to avoid differences between
point of taxation of SPV in X-border situations
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Point of taxation MPV
• No specific article on point of taxation MPV
• Supply of good /service – exclusion of the commissionaire principle –
single transaction
• Applicable in B2B and B2C relationships
Taxation upon redemption, and in principle no later than the
goods are delivered or the services are performed (tax point)
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
VAT treatment of MPV and distribution service
Example: issue of a MPV worth 100 (incl. VAT) via a distribution chain
Sale of MPV nominal
value 100
Sale of MPV with
nominal value 100
Invoice 10
(incl. VAT)
Cash = 90
Sale of MPV with
nominal value 100
Invoice 20
(incl. VAT)
Cash = 80
Cash = 100
Invoice 100 (incl. VAT)
Principal service
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Taxable amount paid voucher
Taxable amount SPV
• No specific article on taxable amount of the supply of the voucher
- Taxable amount depends on capacity of intermediary
- General rules apply
Taxable amount MPV
• Taxable amount of principal supply = nominal value* -VAT related to
goods / services (pro rata if partial redemption)
• Taxable amount of distribution service = nominal value* – purchase
price paid – VAT related to distribution service
* Nominal value = consideration (to be) obtained by the issuer of the voucher
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Conclusion on proposals
What is solved?
 MPV: principle of taxation upon redemption according to the VAT
treatment of the underlying supply, regardless of the capacity of
intermediaries in the supply chain of MPVs
 MPV: principle of taxation of the distribution services with right of
deduction, regardless of VAT treatment supply embedded in MPVs
 What issues remain?
 SPV: Time of taxation clearly defined (payment on account) but
VAT treatment will still depend on capacity intermediaries
 MPV: VAT liability in the hands of the redeemer but no clear
definition of ‘redeemer’
 MPV: No tax neutrality in cross-border situation
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Next steps
Evaluate the proposals
• Agree example models for members
• Consider the implications of the proposals on each model
• Consider alternatives
Treasury Liaison
• Attend stakeholders meeting on 29 June and put forward views on the
implications of the proposals
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Outcome of Lebara case
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Outcome of the Lebara case (CJEU, C-520/10)
Operator /
End user
= Acting in his own name and
for his own account
International outbound
telephone calls/ Issuer
• Specific circumstances of a SPV for telecoms services – al 28
(...) access only to services of one type, the nature and quantity of which are
determined in advance and which are subject to a single rate of tax.
• Single supply by the operator to the first distributor : service is
qualified as telecommunication service
• No supply between the operator and the end user
Focus on contract and legal capacity intermediary
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
HMRC reaction
• Sch 10A says issue of vouchers is not taxed
• Lebara says redemption is not taxed
• Potential for non-taxation of supplies in relation to single purpose
HMRC reaction
• Revised legislation exclude SPV’s from Sch10A w/e from 10 May
• Definition of SPV is different to that envisaged in EU proposals
• HMRC view is that few if any current vouchers will be affected by the
change in legislation
UK Gift Card & Voucher Association
© PwC 2012
20 June 2012
Jim Wilkinson
[email protected]
0774 639855
Martin Blanche
[email protected]
07917 000973
The information in this presentation is solely for guidance on matters of general interest and is provided without any liability for decisions taken - or not taken - based on
it. The application and impact of laws can vary widely depending on the specific circumstances and facts involved. This presentation is not a substitute for professional
advice. Before taking any action, please ensure that you obtain advice based on your particular circumstances from your usual PwC client service team or your other tax
advisers. The materials contained in this presentation were assembled on 26 May 2011 and were based on the law applicable and information available at that moment
in time.
This presentation is proprietary and confidential information of PwC Tax Consultants BCVBA, Woluwedal 18, 1932 Sint-Stevens-Woluwe. All rights are reserved. This
presentation is for your internal use only and you may not provide or make available a copy to any third person without our prior written consent.
© 2012 PricewaterhouseCoopers. All rights reserved. PricewaterhouseCoopers" refers to one or more member firms of the global network of PricewaterhouseCoopers
International Limited, all members of which are separate and independent legal entities.

Why a proposal on vouchers? - UK Gift Card & Voucher Association