Do I pay VAT on gift vouchers when I sell them or when they are used?

It depends on the type. A single-purpose voucher, where everything it buys carries the same VAT rate, is taxed when you sell it. A multi-purpose voucher, which could buy items at different rates, is taxed when the guest spends it. HMRC's rules are in VAT Notice 700/7, section 9.

Can I put an expiry date on a restaurant gift voucher?

Yes. UK law has no minimum period, but the expiry must be clear when the voucher is bought, and the terms must be fair under the Consumer Rights Act 2015. One law firm calls 12 to 24 months widely seen as fair. Print the date on the voucher itself.

Do I have to honour an expired gift voucher?

Not if the expiry was clear at purchase and the period was fair. You can still choose to extend once as goodwill, since a guest at the table often spends more than the voucher. Write the rule down so staff are not making it up at the door.

What happens to unused gift voucher money?

It sits as a liability until the voucher is spent or expires. For a multi-purpose voucher that is never used, no VAT is due. For a single-purpose voucher, the VAT paid at sale is not adjusted unless you refund the buyer. How and when you recognise the income is a question for your accountant.

Can I sell a £50 voucher for £45?

Yes. If the voucher is multi-purpose, VAT on redemption is due on the face value or on the £45 you were paid, if you know it. Because you sold it yourself, you normally do. For a single-purpose voucher, VAT is due on the £45 when you sell it.

Should a restaurant sell experience vouchers or money vouchers?

Money vouchers are safer for you. A £50 voucher buys £50 of food at the prices on the day, while a set "dinner for two" must be honoured as sold. Our analysis of ONS restaurant prices shows a £120 experience voucher sold in September 2024 cost £130.59 to deliver two years later.

What happens to customers' vouchers if a restaurant closes?

Voucher holders usually become unsecured creditors and may not get their money back. If you are selling a restaurant as a going concern, agree with the buyer in writing whether they will honour existing vouchers.

Selling gift vouchers this Christmas: VAT, expiry and pricing

When VAT is due on restaurant gift vouchers, whether they can expire, what a £50-for-£45 offer costs, and voucher terms you can copy.

By the TablePort teamFacts checked 6 November 202612 min read

Someone asks at the till whether you do gift vouchers for Christmas, and you realise you have no idea when the VAT is due or whether a voucher can expire.

Restaurant gift vouchers in the UK follow two sets of rules. For VAT, HMRC splits vouchers into single-purpose (VAT due when you sell it) and multi-purpose (VAT due when it is spent). For expiry, UK law sets no minimum or maximum period, but your terms must be clear at the point of sale and fair under the Consumer Rights Act 2015.

One more risk is easy to miss: restaurant prices keep rising after you sell. Our analysis of ONS price data shows a £120 "dinner for two" voucher sold in September 2024 cost £130.59 to honour in September 2026. This guide covers VAT, expiry and pricing, works out a "£50 for £45" Christmas offer, and gives you a decision table, voucher terms and a register to copy.

Last checked: 4 November 2026.

Is a restaurant gift voucher single-purpose or multi-purpose?

HMRC's rules for vouchers issued from 1 January 2019 are in VAT Notice 700/7, section 9 (Business promotions, updated 25 June 2026). A single-purpose voucher is one where, at the time you issue it, both the VAT liability and the place of supply of what it buys are known. A multi-purpose voucher is "any voucher that is not a single purpose voucher".

	Single-purpose voucher	Multi-purpose voucher
Test	Everything it can buy carries one VAT rate	It could buy items at different rates
When VAT is due	When you sell the voucher	When the guest spends it
VAT on redemption	None; already accounted for	On the face value, or the price paid if you know it
Voucher never used	No adjustment unless you refund it	No VAT at all
Typical restaurant example	Eat-in only restaurant, everything at 20%	Restaurant that also sells cold takeaway or retail

HMRC gives no restaurant example, so here is a practical reading. Ask one question: could the voucher be spent on anything that is not taxed at 20%?

If you only sell meals and drinks to eat in, everything is standard-rated, so a voucher limited to your restaurant is likely single-purpose.
If the same voucher can buy cold takeaway sandwiches (zero-rated), a bag of coffee beans (zero-rated) or a cookbook (zero-rated), the rate is not known at issue, so it is likely multi-purpose.

You can steer the answer with your terms. A voucher that says "valid for food and drink consumed on the premises" points towards single-purpose. Agree the treatment with your accountant before you sell the first one, because it decides which VAT return the money lands in. Our restaurant VAT guide explains which items carry which rate.

When is VAT due on a gift voucher?

Single-purpose: you account for VAT in the return covering the date you sold it, as if you had sold the meal. Nothing more is due when it is redeemed (paragraph 9.4.3).

Multi-purpose: nothing is due when you sell it. When the guest spends it, VAT is due on the voucher's face value, or on "the consideration paid at its most recent supply" if you know it (paragraph 9.5.2). Because you sold the voucher yourself, you normally do know the price.

Unused vouchers: for a single-purpose voucher, "No VAT adjustment can be made if the voucher is not used or not used for its full value, unless a refund is made" (paragraph 9.12.1). For a multi-purpose voucher that is never used, there is no VAT to account for.

Not VAT-registered? None of this applies. Watch the VAT threshold instead: December voucher sales count towards your rolling turnover in the month they are taxed.

What does a "£50 voucher for £45" offer really cost?

Discounted vouchers sell well in December. Here is the VAT and cash effect of selling 200 of them for £45 each, at a VAT-registered restaurant. The redemption rate is our assumption, not a benchmark.

Line	Single-purpose	Multi-purpose
Cash in during December	£9,000	£9,000
VAT due in the quarter of sale	£1,500 (£9,000 ÷ 6)	£0
VAT if 170 are redeemed in 2027	£0 more	£1,275 (170 × £45 ÷ 6)
VAT on the 30 never used	Already paid, no refund	£0
Total VAT	£1,500	£1,275
Meals served against vouchers	170 × £50 face value	170 × £50 face value

The discount itself is the real cost: £5 a voucher, or £1,000 across 200. If your gross profit on food and drink is around 70%, a £50 voucher's worth of meal costs you roughly £12.50 in ingredients (70% GP on £41.67 net of VAT). The guest also tends to spend beyond the voucher, which is where most of the margin comes back.

Two cautions:

Do not budget for unused vouchers. Some will never be spent, but in your first year you cannot know how many. Unspent money can only be counted as income on a reliable estimate, which usually means a few years of redemption history. Ask your accountant how to handle it.
Free vouchers are different. A "spend £100, get a £20 voucher" offer means issuing a voucher for no payment, and HMRC's package rules (paragraph 9.8) stop you reducing the VAT on the original £100 bill. HMRC says a multi-purpose voucher issued for no consideration "may have a value of £0 when redeemed" if the other conditions are met (paragraph 9.5.2). That is not the same as a guest buying a voucher and giving it as a present: the gift does not reduce its value to £0. The conditions are detailed, so get advice before launching a free-voucher offer.

Check with your accountant for your situation.

Can a restaurant gift voucher expire?

Yes. UK law sets no minimum validity for gift vouchers. Which? (October 2026) says expiry dates are allowed "as long as the person buying the voucher was made aware of this at the time of purchase".

The legal test is fairness and transparency under the Consumer Rights Act 2015, section 62. A term is unfair if it causes a significant imbalance to the consumer's detriment, and an unfair term does not bind the guest. In practice:

State the expiry date on the voucher itself, not only in terms on a website.
Give a period guests can use. One commercial law firm suggests 12 to 24 months is widely seen as fair and anything under 12 months is risky (Sprintlaw, 2025). That is a practitioner view, not a legal limit.
Blackout dates must be visible before purchase. If the voucher cannot be used on 24 to 26 December or 31 December, say so at sale.
Do not borrow other countries' rules. Ireland's five-year minimum and the US federal five-year rule do not apply in the UK.

A simple policy: 12 months, with a one-off extension at the manager's discretion if the guest asks. It costs little and turns a complaint into a booking.

How much does an experience voucher cost you to honour later?

More than you sold it for, because restaurant prices keep rising while the voucher sits in a drawer. A money voucher ("£50 to spend") carries no such risk: the guest gets £50 of food at whatever your prices are on the day.

Voucher	Sold September 2025, honoured September 2026	Sold September 2024, honoured September 2026
£50 money voucher	£50 (value fixed)	£50 (value fixed)
£95 tasting menu for one	£99.28 at today's prices	£103.38 at today's prices
£120 dinner for two	£125.40 at today's prices	£130.59 at today's prices

Source: our analysis of the ONS consumer prices index for restaurants and cafés (series D7EW), published 21 October 2026. Prices rose 4.5% in the year to September 2026 and 8.8% over two years, and the annual rate has been 3.5% or higher every month since October 2023. Your own prices may have moved differently.

The gap is your cost, not the guest's: the menu they were promised still has to arrive. That gives three rules:

Sell money vouchers by default. They keep their value for you as well as the guest.
Give experience vouchers 12 months, not 24. On current inflation, a second year roughly doubles the shortfall.
Print a cash value on experience vouchers ("or £120 towards any menu"), so you can honour the value if the dish or price changes.

What happens to the money from vouchers that never get used?

Until a voucher is spent or expires, the money is a liability on your balance sheet, not income. That matters for cash flow: December voucher money is often spent in the quiet weeks of January and February, when you are paying for the food without new cash coming in.

Keep a register. It answers three questions your accountant will ask: how much you owe guests, how much has expired, and which VAT treatment applied. Paste this header into a spreadsheet, one row per voucher:

VOUCHER REGISTER

A: Number  B: Sold on  C: Sold via  D: Face value  E: Price paid
F: VAT type (SPV/MPV)  G: Expires  H: Used so far  I: Balance  J: Status

Example rows:
XM26-001  01/12/2026  Website   50.00  45.00  SPV  01/12/2027  50.00  0.00   Spent
XM26-002  03/12/2026  Till      50.00  50.00  SPV  03/12/2027  20.00  30.00  Open
XM26-003  05/12/2026  Website  120.00 120.00  SPV  05/12/2027   0.00  120.00 Open

Formulas (row 2, copy down):
I2  Balance:  =D2-H2
J2  Status:   =IF(I2<=0,"Spent",IF(TODAY()>G2,"Expired","Open"))

Summary cells:
Owed to guests (face value):  =SUMIF(J:J,"Open",I:I)
Expired, still unused:        =SUMIF(J:J,"Expired",I:I)
Sold in December (cash in):   =SUMPRODUCT((MONTH(B2:B1000)=12)*E2:E1000)

Check the "Expired" total with your accountant before you treat any of it as income.

If a restaurant closes, voucher holders usually become unsecured creditors, and Which? warns they "may struggle to get your money back". That is a reason to sell vouchers honestly, not a reason to avoid them.

Which voucher setup fits your restaurant?

Answer four questions before you sell the first one:

Question	If yes	If no
Can it be spent on anything not taxed at 20% (cold takeaway, retail)?	Likely multi-purpose: VAT when it is spent	Likely single-purpose: VAT when you sell it
Is it for a named experience rather than an amount?	12-month expiry and a printed cash value	Money voucher: 12 to 24 months (see expiry, above)
Is it sold below face value?	VAT on the price paid, not the face value	VAT on the face value
Is it given free with another purchase?	Package rules apply: get advice before launching	Standard treatment

The first answer is a practical reading of HMRC's test, not a ruling, so confirm it with your accountant.

How to price and sell vouchers at Christmas

Offer	Example	Cost to you	Best for
Straight sale	£50 voucher for £50	Nothing beyond the meal	Busy restaurants, walk-in buyers
Discounted voucher	£50 for £45 until 24 December	£5 a voucher	Driving volume before Christmas
Experience voucher	Tasting menu for two, £120	Fixed menu cost; watch price rises	Set menus with a clear value
Booking reward	Book Christmas dinner, get £15	£15 per redeemed voucher, plus VAT advice	Filling January

Experience vouchers ("dinner for two") are easier to give but harder to honour if your prices rise. If you sell one, either fix the menu or state the cash value it is worth against a different menu.

Sell them where Christmas shoppers already are: on your website, on the bill folder in December, in your email to past guests and on your Google profile. A voucher also makes a better answer than a refusal when a guest cannot keep a festive booking; our Christmas bookings guide covers deposits and cancellations.

Voucher terms you can copy

Replace the square brackets. Show these before payment and print the key lines on the voucher.

GIFT VOUCHER TERMS

1. This voucher is worth [£50] to spend on food and drink at
   [Restaurant name], [address]. It is valid for food and drink
   consumed on the premises.
2. Valid until [date, 12 months from purchase]. We cannot accept it
   after that date.
3. Not valid on [24, 25, 26 and 31 December] or with other offers.
4. Any unspent balance stays on the voucher until it expires. We
   cannot give change in cash.
5. The voucher cannot be exchanged for cash or refunded, except where
   the law requires.
6. Please mention your voucher when you book, and bring it with you.
7. Lost vouchers can be replaced if you have the voucher number and
   proof of purchase.
8. Your statutory rights are not affected.

Can TablePort handle this for you?

Yes, for selling and redeeming. TablePort gift cards cover most of the work above:

Sell online. Guests buy a digital gift card from your website, choose a preset or custom amount within your limits, and send it by email with a personal message.
Wallet passes. The recipient keeps the card in Apple Wallet or Google Wallet, in your restaurant's branding.
Redeem at the till. Staff apply the card to a bill like any other payment, and the remaining balance is tracked against the card.
Expiry and terms. Set an expiry or none, and write policy text buyers see before they pay.

One limit: TablePort does not decide your VAT treatment. Ask your accountant whether your cards are single-purpose or multi-purpose. See gift cards.

Frequently asked questions

Do I pay VAT on gift vouchers when I sell them or when they are used?: It depends on the type. A single-purpose voucher, where everything it buys carries the same VAT rate, is taxed when you sell it. A multi-purpose voucher, which could buy items at different rates, is taxed when the guest spends it. HMRC's rules are in VAT Notice 700/7, section 9.
Can I put an expiry date on a restaurant gift voucher?: Yes. UK law has no minimum period, but the expiry must be clear when the voucher is bought, and the terms must be fair under the Consumer Rights Act 2015. One law firm calls 12 to 24 months widely seen as fair. Print the date on the voucher itself.
Do I have to honour an expired gift voucher?: Not if the expiry was clear at purchase and the period was fair. You can still choose to extend once as goodwill, since a guest at the table often spends more than the voucher. Write the rule down so staff are not making it up at the door.
What happens to unused gift voucher money?: It sits as a liability until the voucher is spent or expires. For a multi-purpose voucher that is never used, no VAT is due. For a single-purpose voucher, the VAT paid at sale is not adjusted unless you refund the buyer. How and when you recognise the income is a question for your accountant.
Can I sell a £50 voucher for £45?: Yes. If the voucher is multi-purpose, VAT on redemption is due on the face value or on the £45 you were paid, if you know it. Because you sold it yourself, you normally do. For a single-purpose voucher, VAT is due on the £45 when you sell it.
Should a restaurant sell experience vouchers or money vouchers?: Money vouchers are safer for you. A £50 voucher buys £50 of food at the prices on the day, while a set "dinner for two" must be honoured as sold. Our analysis of ONS restaurant prices shows a £120 experience voucher sold in September 2024 cost £130.59 to deliver two years later.
What happens to customers' vouchers if a restaurant closes?: Voucher holders usually become unsecured creditors and may not get their money back. If you are selling a restaurant as a going concern, agree with the buyer in writing whether they will honour existing vouchers.