Gift card no tax?

Discussion in 'Buying Tips and Advice' started by samalexhall, Jun 20, 2010.

  1. samalexhall macrumors member

    samalexhall

    Joined:
    Jun 1, 2010
    #1
    I just noticed when I was about to buy an MBP that (in the UK, don't know about the US) then of you use a gift card there is no tax!
    Would it be illegal if I either bought myself a huge gift card, or if I got a friend to give me one and paid them the money back?

    Heres a screen shot of what I mean...

    (I had a quick scan of recentish posts and couldn't see anything about it, sorry if I missed it:rolleyes:)
    edit: heres a better screenshot the lst one was awful sorry
     

    Attached Files:

  2. lcseds macrumors 6502a

    Joined:
    Jun 20, 2006
    Location:
    NC, USA
    #2
    In the US, the buyer of the gift card buys the card at face value, no tax. The person redeeming the gift card must pay full taxes on the purchase. So if he/she had a $20 gift card, and the item was $20, then he/she would still need some cash to pay the tax.
     
  3. samalexhall thread starter macrumors member

    samalexhall

    Joined:
    Jun 1, 2010
    #3
    I think in the UK it would count as a gift, which I'm pretty sure means no tax...
    But don't you have to say if you're using a gift card at checkout, so the price is already charged so it probably won't change. Just thought about doing it though as it would save at least £200 on my MBP:D
     
  4. zeemeerman2 macrumors 6502

    Joined:
    Feb 21, 2010
    #4
    Something related is happening here in Belgium. Not exactly the same, but... never mind.

    Anyway, please check if your UK tax is VAT or not.
    If it's Value Added Tax, you may pay less when buying the laptop. But if it's not, you just pay less tax at the end of the year.

    Check it out to see that you don't be surprised if you have to pay the full price of the MBP - while at the end of the year be careful that you distract the tax from the MBP from your yearly taxes.


    Note that above information can be wrong at any level. I know of Belgian rights and taxes, not of UK ones. But see if you have to pay with VAT or without VAT.
    * There might even be no yearly taxes in UK. I don't know. :/
     
  5. samalexhall thread starter macrumors member

    samalexhall

    Joined:
    Jun 1, 2010
    #5
    The tax is VAT, so I think it might not apply if its a gift!
    UK VAT is prob going up to 20% so it would save a hefty chunk.
    I think over UK rules if a gift is given no tax applies unless the gift giver dies within 7 years (though that could just be to avoid inheritance tax im not sure)
     
  6. gnasher729 macrumors P6

    gnasher729

    Joined:
    Nov 25, 2005
    #6
    The gift card itself is very similar to cash. You hand over £20, and you get a gift card with "£20" written on it. You don't pay VAT for the gift card, just as you don't pay VAT when you go to your bank and they give you a £20 bill.

    When you use the gift card to pay, you have to pay VAT on your purchases just the same as if you paid by cash. So if an item costs £10 + 17.5% VAT, then they will take £11.75 out of your gift card, or take £11.75 of your cash.

    In other words, you can't save VAT by buying gift cards. Which then makes your cunning plan completely legal and completely pointless :rolleyes:
     
  7. Umbongo macrumors 601

    Umbongo

    Joined:
    Sep 14, 2006
    Location:
    England
    #7
    You're really confused over this. For a start Apple's FAQ clearly says VAT is not charged when using iTunes gift cards, you are buying a Computer.
    Giftcards are nothing to do with the act of gift giving for tax purposes.
     
  8. samalexhall thread starter macrumors member

    samalexhall

    Joined:
    Jun 1, 2010
    #8
    Yeah, i was kinda confused! I think uv all managed to clear that up for me.
    Cheers
     

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