Forum

• # 82103
• Fri 20 Apr 2012 09:02 AM

My client is an Estate Agent, & is considering a promotion to give sellers a "free" TV (value around £400) upon completion.


My initial view is that he can re-claim the VAT on purchases of the TV's, but will need to account for VAT on the sale/gift as it breaches the £50 threshold for business gifts.


Any confirmation / alternative view with references to the applicable guidance would be much appreciated.

Thanks in advance.       

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• # 82147
• Sat 21 Apr 2012 11:16 AM

Hi Capt Slaphead (love it!)

I think you are correct in saying he will have to account for VAT at the cost price of the TV....see this section of VAT 700 guide:-

2.1 Free gifts of goods for no consideration

If goods on which you have an entitlement to input tax are given away and there has been neither monetary nor non-monetary consideration (see section 3), you must account for VAT on their cost value, unless the cost to you is £50 or less and it does not form part of a series or succession of such gifts to the same person. For more about cost value, see Notice 700 The VAT Guide.


Pauline 

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