Contracts and Financial
Non-Disclosure Agreement
Before we can discuss any details with you as a new client partner, we will ask you to sign our Non-Disclosure Agreement. Once signed, you will find us happy to provide the confidential information that will help us consider your Gift Card proposals.
Standard Contract Agreement
As a new client partner, we will both need to commit to a business association. This means signing our Standard Contract Agreement.
Financial
To aid understanding, we have provided below a simple illustration showing the financial flows of a typical Gift Card transaction.
Assumptions
- £100 Transaction
- 20% Commission Rate agreed with our client partner
- 50 : 50 Commission split between Retailer and InComm Europe
Process
Customer buys a £100 Gift Card from the retailer and pays at point of sale
At the end of the trading week, we send to the retailer:
1. A VAT-exempt invoice for £100 representing the gross cash received by the retailer
2. A Self Billing Invoice representing the retailer's commission. In this example, £17.50 plus VAT
- Total Commission = £100.00 x 20% = £20.00
- Retailer Commission = £20.00 x 50% = £10.00
3. A statement showing £90.00 as the Net amount due to InComm Europe
The retailer pays this amount in accordance with the agreed terms.
VAT
We have received expert advice on the treatment of VAT on our face value Gift Cards. Provided the retailer (or an associated) does not redeem the voucher, VAT is not due on the sale. The client partner's must account for the VAT in full on redemption. HMCE's compliance unit supports this view alongside Baker Tilly chartered accountants, Sainsbury's Supermarkets Limited (and their advisers) and by Apple (iTunes).
Our treatment of VAT on Gift Cards is consistent with the interpretation where VAT is due only on the commission and the redeemer pays the VAT on the face value.