McPrepaid: Luncheon Vouchers grind beefburgers to a halt
Which retailer has done one of the best jobs of supporting and promoting contactless payments in the UK? I would say McDonald’s. All their restaurants proudly display payments terminals that accept contactless payments and they have made a considerable investment.
The standard reasons a retailer/ restauranteur would want to accept contactless payments would include the speed of service at the till. But McDonald’s continue to accept the good old fashioned, paper, Luncheon Vouchers.
I took this photo yesterday in one of the McDonald’s outlets in Reading Berkshire. Sorry for the poor quality. It shows a manager coming along to help a colleague who was unsure how to accept a Luncheon Vouchers payments. So good for McDonald’s: they support new payment mechanisms, they are not running away from the old (even if it slows things down a little) and they were still happy to accept my cash.
Luncheon Vouchers? Don’t know what they are? I used to receive 5 x 15p = 75p a week of Luncheon Vouchers in my first full-time job. Learn all about them below.
A Luncheon Voucher (LV) is a paper ticket used by some employees in the United Kingdom to pay for meals in private restaurants. It allows companies to subsidise midday meals (luncheons) for their employees without having to run their own canteens.
The scheme dates to 1946, when food rationing was still in force following the end of the war. The British government granted an extra-statutory tax concession, believing that this would help citizens afford healthy meals. Under the concession, luncheon vouchers are free of income tax and national insurance contributions up to the value of 3 shillings (15 pence) a day. The initial level of 2s. 3d. (11.25p) was increased in 1948 to its current level of 3/- (15p), but has not been adjusted for inflation since.
The UK government announced in March 2011 its intention to abolish this relief with effect from April 2013, although this was subject to independent advice from the Office of Tax Simplification following wider consultation. The abolition of the concession, effective from 6 April 2013, was confirmed in December 2011, with the government maintaining its view that the relief was redundant given that it is worth only 15p per day.
In the early days, a company that wanted to subsidise their staff lunches, but not run a canteen, had to have vouchers printed and make arrangements with one or more local restaurants to accept them. In addition, it would have to administer the scheme (for instance by checking and counting the vouchers returned from the restaurants prior to settling their account).
In 1954, a businessman, John Hack, realised that a single standardised voucher acceptable across the UK would be more logical and efficient. He subsequently started the Luncheon Vouchers Company in 1955 to implement the nationwide Luncheon Voucher scheme. In 1956, nine large catering companies purchased the company, with Hack staying on as managing director. The company was bought by Accor in 1982. Restaurants that accept the vouchers display an “LV” logo in their windows.