VATSC03384 - Identifying a supply: Supplies of goods for no consideration: Qualifying charitable donations: How to value donated goods
VAT Act 1994, Schedule 4, paragraph 5A(3) explains how to determine the value of donated goods. The value is the lower of:
the cost to the donor in acquiring or producing the item
the cost to the donor of purchasing either:
an identical item, including age and condition, or, if this cannot be determined,
an item similar to the donated item and of the same age and condition.
If the acquisition or production cost is not known, the item’s value is taken to be the replacement cost described in b.
In both a andbthe value excludes any VAT.
These limits apply per item. “Item” is not defined further but will usually be what would be purchasable as a single item in a retail setting. For example:
with a pallet of 100 bottles of shampoo, each bottle will generally be an item;
a box of medicine containing a blister pack with 28 pills will be a single item, rather than 28 items.