The history of LV's

Background

Luncheon Vouchers were created in 1954 by John Hack and the company was subsequently registered and started trading in 1955.

Where did the idea come from?

John Hack and some friends were lunching together when he noticed people paying for their meals with slips of paper. Being curious, he asked a waiter about this and was told that the restaurant had arrangements with various companies whereby their employees could use these printed slips to pay for their meals. The restaurant then sent the slips back to each company who would then pay the restaurant.

This process involved any company who wanted to subsidise their staff lunches, but not run a canteen. However they had to have vouchers printed, make arrangements with two or three restaurants, check and count the vouchers when returned and then send a cheque to settle the catering establishment's account.

John Hack gave this some thought and with a friend decided to start a company which would do all the work for a service charge from both the clients and the caterers. He established that a uniform meal voucher that was accepted throughout the UK would be more logical and efficient.

Post War Britain had only just seen the end of rationing so it was seen as a priority that people should have a proper meal everyday. A few caterers decided to sign on but would not agree to pay the service charge so eventually the idea of caterers paying anything was dropped.

Government backing

The Government granted Luncheon Vouchers (or LV's as they are commonly known) full exemption from National Insurance Contributions and a tax break of 15p.

In 1954, 15p was a reasonable allowance, however as the years passed it remained the same despite the introduction of decimalisation and the effects of inflation. The vouchers remained financially beneficial because of the NIC exemption which meant that £1 was worth up to 33% more than £1 in cash.

The first Luncheon Voucher client

The first company to purchase Luncheon Vouchers was Deloitte, Plender and Griffiths. This order was for 20,000 vouchers per month in a 2/6d denomination.

The company's progress was then restricted by the main catering companies' refusal to join the scheme and as these companies owned the restaurants where the staff preferred to eat, prospective clients were reluctant to join.

A change of ownership

This ended in 1956 when 9 of the biggest catering companies (including Lyons, Forte's, Kardomers, Express Dairy) formed a consortium and purchased the Luncheon Voucher Company, keeping John Hack as Managing Director.

Raising the profile of Luncheon Vouchers

Advertising was occasionally placed in the better newspapers, never the tabloids. A little later, cardboard signs were given to all caterers to place by their tills to indicate that they would accept vouchers issued by Luncheon Vouchers and subsequently plastic window stickers were distributed.

How to find a caterer

Printed lists were sent to clients indicating where LV's would be accepted. The lists would also show the areas near the company's offices.

Where Luncheon Vouchers were located

The company first operated from 2 basement offices in Victoria Street. They then moved to 74A Regent Street, 22 Golden Square and then finally at Vauxhall Bridge Road.

John Hack remained as Managing Director until his tragic death in a car accident in 1977. Dirck Gunning was appointed Chief Executive in his place, as the company moved into a more commercial direction.

Who printed Luncheon Vouchers

Thomas De La Rue was the first security printer to produce the vouchers. After 5 years A. Peyton and Company took over the contract until they were replaced by Bemrose.

A change in legislation

The budget of April 1999 saw a change in the law that led to the NIC exemption being brought into line with the tax break (i.e. 15p). This meant a tax and NI break of £36 a year.

The Government reviewed their policy on NIC and Vouchers after it came to its attention that certain employers were avoiding paying NICs by paying their staff a very low wage and then topping it up with supermarket vouchers and gift vouchers.

Accor campaigned vigorously for Luncheon Vouchers to be disregarded from the review, as they are used as a canteen replacement and as a social voucher scheme. However this appeal was not successful.

Since the loss of the complete NIC exemption, the volumes of Luncheon Vouchers issued has dropped, but has now stabilised. Luncheon Vouchers remain a valued and popular benefit for many companies who recognise their non-financial advantages, as a tangible and social benefit that can be offered to all staff.

New Luncheon Vouchers

Today, Luncheon Vouchers has experienced a make over, with a new image and design.

Information

If you would like more information on Luncheon Vouchers please contact Accor Services via e-mail: sales@accorservices.co.uk or telephone: 020 7887 1278.