Business gifts and samples

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Business gifts and samples
  • Business gifts
  • Gifts of goods
  • Prizes / rewards issued to self-employed individuals
  • Gifts made via an intermediary
  • VAT treatment
  • Gifts used for business purposes
  • Gifts of services
  • Samples

This guidance note provides an overview of the VAT treatment of supplies of business gifts and samples.

VATA 1994, Sch 4, para 5; VATA 1994, Sch 6, para 6; HMRC Notice 700/7 2006/112/EC, Article 16 ; De Voil Indirect Tax Service V3.211; V7.430; V6.170 (subscription sensitive)
Business gifts

Business gift is the term used to describe anything that a business gives away and the recipient of the gift is not required to make any form of monetary or non-monetary payment for the goods.

VATSC22000; De Voil Indirect Tax Service V7.430 (subscription sensitive)

A gift of business assets is treated as a supply of goods for VAT purposes and will be liable to VAT at the relevant rate unless one of the following exceptions applies:

VATA 1994, Sch 4 paras 5(1), 9; FA 2007, s 99(3) (subscription sensitive); EMI Group plc v HMRC ECJ Case C–581/08; Finanzamt Burgdorf v Fischer ECJ Case C–322/99, [2001] STC 1356
  • there is no supply (and no VAT liability arises) unless the donor (or any of his 'predecessors') has or will become entitled to:
    • credit for the whole or any part of the input tax on the supply, acquisition or importation of the goods or of anything comprised in them
    • a refund of VAT on the supply or importation of those goods (or anything comprised in them) under the rules for refunds of VAT to persons established in other EU member states or the EC 13th Directive – see the Overseas VAT refunds guidance note for more information
  • there is no supply (and no VAT liability arises) on a gift of goods made in

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