Business gifts and samples

Produced by Tolley
Business gifts and samples

The following Value Added Tax guidance note Produced 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?
  • What types of goods could be treated as gifts?
  • What is treated as a gift of services?
  • What is the VAT treatment of prizes / rewards issued to self-employed individuals?
  • What is the treatment of gifts made via an intermediary?
  • When is VAT due on gifts?
  • Gifts used for business purposes by the recipient
  • What is the VAT treatment of gifts given at sporting or entertainment events?
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

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 notusually treated as business gifts?’ below when different VAT rules will most likely apply.

What are notusually treated as business gifts?

Businesses that are involved in providing ‘gifts’ in the following situations may notcome 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.

  1. 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 (until 31 December 2020) 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

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