Thank you for your answer.
I think the main issue here is that the hotel feels that they have already paid HMRC 20% VAT on the voucher and therefore rather than us chargin commission on the £100 they think we should be charging commission on £83.33 and then we can add VAT on to our commission.
They feel that by us charging commission and VAT based on the gross voucher value that in effect we are charhing VAT on VAT.
I just wanted to be sure where we stood on this one as VAT around gift vouchers always seems so complicated.
The crux of the matter I would say is that because the commission is based on a higher amount, they receive less revenue per voucher, even though they can reclaim the tax on this.