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HMRC internal manual

VAT Valuation Manual

Specific applications: business gifts and samples: value of gifts that are taxable supplies

Articles constitute gifts where there is no obligation on the donor to give them and the recipient is not obliged to do or give anything in return. Competition prizes will usually be treated as gifts. These are normally taxable supplies and should be valued in accordance with the provisions of paragraph 6 of Schedule 6 to the VATA 1994. You can find out more about this in VATVAL08700.

Gifts of services; if business goods are used for private or other non-business purposes, a taxable supply of services may be deemed to have taken place. This supply will be valued in accordance with the provisions of paragraph 7 of Schedule 6 to the VATA 1994. You can find out more about this in VATVAL08900.