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Where Taxpayers and Advisers Meet

Accepting Gift Vouchers

John617
Posts:1
Joined:Mon Sep 11, 2017 5:47 am
Accepting Gift Vouchers

Postby John617 » Mon Sep 11, 2017 5:58 am

I am selling digital software and a significant number of my sales are coming from overseas customers where PayPal is not popular. As an alternative option I'm accepting Amazon gift vouchers and I have so far accepted over £5000. This puts me in a difficult position; my understanding is that I will need to declare this as income and pay tax on it like usual, however this money can't be withdrawn from Amazon. I fear that if I stop accepting gift vouchers this will have a noticeable impact on my sales. My questions are, is my assumption correct in that tax will need to be paid on this, and is it actually legal to accept gift vouchers as payment for a product/service?

JRG
Posts:424
Joined:Wed Feb 03, 2010 4:40 pm

Re: Accepting Gift Vouchers

Postby JRG » Sat Sep 16, 2017 9:53 am

To my mind, accepting Amazon gift vouchers in payment is equivalent to accepting cash or Paypal payments, and should be declared as income.
The fact that you cannot withdraw the money from Amazon is immaterial, as they can be used to purchase goods in the same way as cash, etc.

LozaACCS
Posts:1504
Joined:Wed Aug 06, 2008 3:55 pm

Re: Accepting Gift Vouchers

Postby LozaACCS » Tue Sep 19, 2017 6:47 am

Accounts prepared for tax purposes should follow GAAP subject to legislation in certain areas.
The general principle is that income must be in the form of money or moneys worth, there is no equivalent for traders of the BIK rules applying to employees, so the issue is generally one of,
Does the receipt arise from the trade or is it received in a personal capacity (in which case no liability arises)
Is the receipt of a revenue or capital nature.
Does specific legislation exist for the receipt in question.
In this case you make it clear that the vouchers are received as income for services rendered, and can be exchanged for moneys worth so yes they should be included as income.
I assume that VAT is not in point, if it were then issues could arise on the value of the supply.

A further (perhaps more worrying issue) is why you are being paid in vouchers, you state that the overseas customers are averse to using pay pal, why is this ? could it be that they wish to conceal their identity, if so there are AML rules of which you need to be aware, any advisers you use should require explanations from you regarding these transactions.


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