Andrew Needham looks at the VAT recovery rules for business gifts and when output tax is due.
Many businesses give gifts to customers and staff, or to promote their business. The rule relating to free gifts not only relates to promotional items and Christmas gifts but also (among others) to:
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‘executive presents’;
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long service awards;
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retirement gifts;
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items distributed to trade customers;
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prizes from amusement machines, etc.;
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prizes in betting gaming and lotteries;
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Christmas gifts; and
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goods supplied to employees under attendance or safety at work schemes.
