VAT on gifts - January 2010
Are you VAT registered and make gifts to customers or clients? If so you can claim back the VAT on the gifts you make.
HM Revenue and Customs often promote how you cannot claim tax relief for the cost of gifts unless they cost £50 or less and carry an advertising theme.
It’s a common misconception that these rules also apply to VAT. The rule on advertising does not apply for VAT purposes and such you can reclaim all the VAT on their purchase. If however the VAT exclusive cost of the gift is above £50 you must pay output VAT as if you had sold it.
To find out more information, please email Barry at barrye@wellsassociates.com