It is becoming more commonplace for businesses to set up reward schemes to acknowledge staff performance, but it is also an area where hidden or unexpected VAT costs arise, which may make employee awards costlier than expected. Awarding staff with vouchers is a popular way to recognise high-performing employees, and a recent case has considered the VAT implications of this. While businesses may expect that they can recover the VAT incurred on the purchase of the vouchers for staff, if they do so, a question arises as to whether the business also needs to account for output tax too.
Source Crowe
See also ECJ C-607/20 (GE Aircraft Engine Services) – Judgment – Issue of retail vouchers to employees
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