Occasionally some businesses may wish to issue gift vouchers to their clients that are redeemable at a later date. This guide explains how to enter and account for gift vouchers in QuickFile.
If you sell gift vouchers at or below their monetary value, no VAT is due. Then, when the voucher is redeemed at a later date, the transaction is treated as though the face value voucher was cash, and VAT is due on the full value of the transaction, unless you are able to show a discount was applied to the voucher, in which case VAT will only be due on the discounted value, instead of the full face value of the voucher.
You can handle the transaction on QuickFile by following below steps:
First set up a new bank account named ‘Gift Voucher Sales - Deferred Income’.
Enter the sales of gift vouchers into the relevant bank account i.e. Bank account, Petty Cash etc by either uploading the transactions from your bank statement or by entering the transactions manually, as a new deposit into the bank account by clicking on the button ‘Input New Transaction’ ()
Tag all the voucher sales on the bank by selecting ‘Tag Me!’ followed by ‘Bank transfer between accounts’. On the next screen select the ‘Gift Voucher Sales - Deferred Income’ bank account as the ‘Transfer from account’. This will allocate the payment to the new deferred income account as “Money Out”.
When the voucher is used, create a new customer called Voucher Sales or enter the customers actual details.
Next, either raise a new sales invoice and log the payment as being paid to the new bank account called ‘Gift Voucher Sales - Deferred Income’ or enter it as a new deposit into the new bank account by clicking on the button ‘Input New Transaction’ and then tagging the transaction.
This will convert the balance on the new deferred income account to sales with VAT (if applicable). It will also maintain a balance of all deferred income received from the sale of vouchers yet to be redeemed, which can be converted to sales after the expiration date of the voucher.