Harvey Norman Vouchers

swampy353

On St Stephens day HN were running a promo where you would get 10% of your transaction value back as a voucher (min spend €250)

Have a couple of queries because a couple of points really don't make sense

1. These vouchers are only valid for 30 Days, does this not go against the recent legislation on vouchers saying they have to be valid for 5 years?
2. In the VAT breakdown, they have applied -23% VAT (reversal) for the voucher. Am I wrong in thinking that vouchers should be at 0% VAT and that the VAT liability is on the product that is purchased?

If I am correct, If I use my voucher, any VAT due on the purchase would have already been reversed meaning HN is not paying VAT on anything purchased with these vouchers.

L1011

A voucher like that would not be covered by the voucher legislation as nobody bought it. Its a bounce-back offer; these are pretty common but usually for a lot less value. It isn't a general purpose gift card.

I can't comment on the specifics of the VAT treatment but any attempt to scam Revenue is likely to be noticed and punished; so is very unlikely from a firm of that scale.

swampy353

Re expiry date from what I have seen on citizens information there maybe an exclusion there but it's not overly clear.

In terms of the tax treatment, I just can't tally how it would work. Have worked in retail before and all vouchers were at 0%,if they weren't you would be double VAT'ed but in this case the only way that I can see that it would be legit is if they are treating the voucher returned as a deduction off face value but seems slightly underhand as you would assume a decent amount of the vouchers won't be claimed. But that still doesn't solve the issue if the voucher is claimed.

JVince

It's a promo voucher. They can give 1 day validity if they wish.

A small supermarket called Dunnes has been doing similar for almost 10 years. They give 10 days validity.

The vat calculation is correct unless you have purchased a product that is zero rated. (Basic foods, Books or children's clothing are about all that are now zero rated in consumer goods)

28064212

https://www.boards.ie/discussion/2058328690/harvey-norman-vouchers

For (1.), no. The legislation you are talking about is Consumer Protection (Gift Vouchers) Act 2019 https://www.irishstatutebook.ie/eli/2019/act/38/enacted/en/print.html, and it explicitly excludes any voucher

(c) that is supplied in connection with a promotional scheme that is connected to the purchase of specified goods or specified services,

For (2.), I haven't seen the specific terms, but I would assume the 10% is applied against the VAT exclusive price (which is pretty reasonable, since it's not money HN are actually getting, they're just collecting it for Revenue). So if you bought an item that was €1,230, your voucher is initially shown as €123, minus 23% for VAT, meaning your final voucher value is €100.

swampy353

There is no discount off the orginial purchase price so based on my understanding of VAT, there shouldn't be a reduction in VAT on it.

No matter which way I slice it, I cannot make the figures add up. Using the purchase I made as the basis

Purchase price of a hoover was 379 gross, vat of 70.87, net 308.13.

Gift card issued for 37.90 with a VAT reversal of 7.09.

Total VAT payable by HN is 63.78

If the voucher is not redeemed, then it's an effective rate of ~21% VAT been paid by HN instead of 23%.

If only the total value of the voucher is redeemed, they are effectively only paying VAT on the first €379. The VAT on the additional purchase is cancelled out by the VAT reversal on the issue of the gift card. Meaning between the two purchases the VAT paid on total purchases of 416.90 is 70.87 which works out as a VAT rate of just under 21%.

swampy353

There is a difference between Dunnes and these vouchers. Dunnes has a requirement that has to be be met before the voucher becomes active, the €50 spend.

The HN gift card is a straight up gift card, there are no minimum spends etc attached to it.

From reading the statute itself, you can have short dated vouchers once the period is less than 3 months. So the issuing the voucher is fine, just the way they are doing the vat on it seems dodgy

28064212

@swampy353

Gift card issued for 37.90 with a VAT reversal of 7.09.

Where is the VAT reversal mentioned? On the card or the receipt for the original item?

If you brought the gift card in tomorrow to purchase an item for €100, how much would you get off the item?

swampy353

https://www.boards.ie/discussion/comment/121548318#Comment_121548318

It shows as part of the VAT breakdown on the orginal receipt:

VAT @ 23% = 70.87

VAT@ 0% = -7.09

Dont have receipt to hand but will post pic of it tomorrow.

If I go back in I would get the full face value off my purchase (i.e. €100)

swampy353

Receipt