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
  • What are not usually treated as business gifts?
  • What are treated as business gifts?
  • When is VAT due on gifts?
  • Can VAT be recovered on samples?

This guidance note provides an overview of the VAT treatment of supplies of business gifts and samples A gift of business assets is treated as a supply of goods for VAT purposes which is liable to VAT at the relevant rate unless it comes within one of the exceptions mentioned in What are not usually treated as business gifts below when different VAT rules will most likely apply 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 What are not usually treated as business gifts Businesses that are involved in providing gifts in the following situations may not come within the scope of the business gift rules explained in this guidance note and they should refer to the relevant guidance note for more information on the relevant VAT treatment VATA 1994 Sch 4 paras 5 1 9 FA 2007 s 99 3 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 all or part of the input tax on the supply acquisition or importation of those goods or of anything comprised in them or a VAT refund on the supply or importation of those goods or anything comprised in them under the VAT refund rules applicable to persons established in other EU member states or the EC 13th Directive see the Overseas VAT refunds guidance note for more information A person is the predecessor of the donor where the donor acquired the goods from him under a transaction relating to the transfer of a business as a going concern which was treated as neither a supply of goods nor a supply or services see the

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