Annual General Meeting

2009/10 Year End Accounts2010/11 Budget

Bill Alexander

Membership2010 Membership• 64 Members

– 35 Issuer Members– 29 Service Members

– 13 members who have yet to pay

2009 Membership• 66 Members

– 35 Issuer Members

– 31 Service Members

2009/10 End of Year AccountsRevenue Expenditure

Membership Subscriptions•Annual Fee•Ernst & Young

£132,000

£28,000 £37,000

Social Events £3,000 £3,000

Conference £91,000 £84,000

Market Research £35,000 £39,000

Secretariat Fees £62,000

PR £24,000

Member Meetings £17,000

Other £31,000

TOTAL £289,000 £297,000

PROFIT - £8,000

2010/11 BudgetRevenue Expenditure

Membership Subscriptions•Annual Fee•Ernst & Young

£138,000

£32,000 £35,000

Social Events £1,000 £1,000

Secretariat Fees £64,000

PR £26,000

Member Meetings £17,000

Other £32,000

TOTAL £171,000 £175,000

DEFICIT / SURPLUS - £4,000

2010/11 BudgetRevenue Expenditure

Membership Subscriptions•Annual Fee•Ernst & Young

£138,000

£32,000 £35,000

Social Events £1,000 £1,000

Secretariat Fees £64,000

PR £26,000

Member Meetings £17,000

Other £32,000

TOTAL £171,000 £175,000

DEFICIT / SURPLUS - £4,000

Potential Additional Expenditure not included in Budget

Bribery Act £3,400

Ernst & Young Fee for VAT Representation £22,500

PR for Market Research £3,000

Response to E-Money Directive £tbc

Constitution Changes• Proposal received to amend the constitution

regarding the length of service for executive members

• Currently Constitution States:• An EC member cannot remain on the EC for more than 24 months, and

must resign after this period. They may however stand for re-election.

• Proposal is:• An EC member cannot remain on the EC for more than 24 months, and

must resign after this period. They may however stand for re-election for a further 24 months, at the end of this term (i.e. A total period of 48 months) an EC member may not stand for re-election until a period of 12 months has lapsed.

Wendy AndrewsErnst & Young

8 November 2010

UK Gift Card and Voucher Association

VAT update

VAT update

LMUK/Baxi

TNT and postal services

European Harmonisation

2015 EU changesApril 21, 2023 Presentation title Page 12

LMUK/Baxi

VAT and loyalty schemes

Recovery of VAT on reward goods and services

Provided to customer or to organiser of scheme?

Potential for some VAT recovery – referred back to UK Supreme Court

April 21, 2023 Presentation title Page 13

TNT and postal servicesVAT liability of postage supplied by Royal Mail

Pre-agreed contracts should have been subject to VAT

Potential for retrospective claims

Change in liability for the future

April 21, 2023 Presentation title Page 14

EU harmonisation

UK position:Face value vouchersRetailer/credit vouchersTreatment in supply chain

EU position:Single/multi purpose vouchersDifferent market

April 21, 2023 Presentation title Page 15

EU harmonisation

• Next Steps:

EU Commission – proposal documentLiaison with HM Treasury and HMRC

regarding UK position in discussionsMake sure that views of UK business are

represented in all discussionsTimescale?April 21, 2023 Presentation title Page 16

EU Harmonisation - 2015

Place of supply of services to consumers

From 2015 will be where the consumer belongs

Cross border supplies to private customers subject to local VAT

Unharmonised voucher treatment will be complex and difficult

April 21, 2023 Presentation title Page 17

Andrew JohnsonDirector General

Bribery Act

• Changes to current act come into force April 2011

• Wording in the act suggests that third party incentives/dealer incentives could be deemed a bribe

• Awaiting he outcome of consultation for final wording of the act

• Been assured that the act is not intended to stop genuine third party incentives

Andrew JohnsonDirector General

Self Regulation & Emoney

Emoney Directive

• UKGCVA working with HM Treasury & Financial Services Authority

• Changes come in April 2011

• Implementation consultation papers issued by both Treasury & FSA – deadline for response is 30th November

• UKGCVA will respond, encourage members to respond

Emoney Directive

• The consultation papers refer to implementation• The EMD has been ‘written’ into EU law and cannot

be changed, this is about how the UK implement the regulation

• Treasury ‘set’ the rules, FSA ‘police’ the rules, hence the two consultations

• UKGCVA needs to engage more with FSA as they will determine the limited network guidelines, i.e. What is in scope for Emoney and what gift card programmes fall out of scope

2EMD

UKGCVA Members Meeting

26

A Review of Key Issues

Limited Network

Redemption of e-Money

Agents and Distributors

Transitional Issues

27

Limited Network

• Definition

• Grey Areas

• Possible Solutions

28

Redemption of e-Money

• at any time

• at par value

• safeguarding

29

Agents and Distributors

• Key differences

• Registration

30

Transitional Issues

• PSD 2 months notice to charge (reloadable / non-reloadable)

• Re-carding if now outside e-money

• Timing for Grandfathering

31

Contact

Global Head – Cards and Payments

Tel.: +44 20 7429 6074

Fax: +44 20 7429 6374

Email : rcourtneidge@salans.com

Salans

Millennium Bridge House

2 Lambeth Hill

London

EC4V 4AJ

www.salans.com

Robert Courtneidge

Key Questions in Treasury Consultation• Is FSA guidance, and case by case consideration, the

right approach to determining what constitutes limited network?

• Are there any cases where the law determining what constitutes a limited network may be unclear? How should these cases be resolved?

• Are voluntary codes of conduct, supported by safeguarding arrangements for customer funds, the right way to protect consumers in the unregulated sector?

• Is there a better alternative?

Self Regulation• Treasury recognise (as a result of EMD) significant

proportion of industry remains unregulated i.e. Gift vouchers and closed loop cards

• Treasury engaged with Office of Fair Trading• UKGCVA approached by Treasury and OFT to discuss

‘self regulation’• Expected to discuss Q1 2011• Treasury make statement in EMD consultation so we need

to ‘show intent’ by 30th November• Results of consultation, including self regulation published

by Treasury, FSA and OFT second week December 2010

Self Regulation

• UKGCVA invited to meet with Treasury and OFT on Monday 15th November – speak to Andrew if you would like to attend

• British Retail Consortium meeting with OFT today

• Objective of the meeting:– for OFT/Treasury to scope out the potential ‘liability’ to consumers

– Understand how the industry feels about self regulation

– Understand if self regulation is feasible

Best Practice

• OFT have tentatively indicated the UKGCVA current ‘Best Practice’ statement in the constitution may be sufficient

• OFT may give this Best Practice the ‘rubber stamp’

• This addresses– ‘Treating the Customer Fairly’ &

– ‘Prudent Financial Protections of Consumer Funds’

Best PracticeTreating the customer fairly Issue clear, uncomplicated terms and conditions, that include guidance on key issues such as

Expiry dates and what this means.Any card or voucher feesAny restrictions on when and how the gift card or voucher can be spentLegal responsibilities of the card or voucher holder and issuer.

 Ensure that the staffs (both direct and indirect) of the issuing party are trained in all procedures relating to the gift card so that they can provide a fair and understanding service to the gift card or voucher customers. These procedure should include –

What to do in the event of a lost or stolen cardRefund policyHow to check a card balanceHow to spend the funds on the card or voucherFor cards, any minimum or maximum load values

 

Best PracticePrudent financial protection of consumer funds All gift card and voucher issuers should ensure adequate provision is made on their balance sheet for unredeemed gift cards and vouchers which should also include a prudent policy on writing off unredeemed vouchers. Where issuer’s cash ratios are considered to be less than strong consideration should be given to ring fencing the unredeemed funds to ensure long term protection against liquidity problems. If an issuer faces financial difficulties, the sale of prepaid gift cards and vouchers should cease immediately unless the funds are guaranteed by a third party (which could include an independent trust fund where the funds are directly paid into).

 

Best Practice

• Do/can members adhere to these Best Practice guidelines?

• Timing is not great, second week of December ‘made public’

• Implications across the industry if OFT take a firm stance

• Action from UKGCVA

Any

Other Business?