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HMRC internal manual

VAT Valuation Manual

From
HM Revenue & Customs
Updated
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Specific applications: business gifts and samples: goods and services supplied as inducements

A trader may offer a “gift” on condition that the recipient buys something or provides or does something benefiting him in return. Goods and services supplied in these circumstances are not true gifts but constitute supplies made in return for a non-monetary consideration. These will usually be valued according to the provisions of section 19(3) of the VATA 1994. You can find out more about this in 05300 of this volume of guidance.

There are some special rules which apply to business promotion schemes. These are explained in Notice 700/7 Business Promotion Schemes. The relevant policy team to contact is the VAT Supply team if you cannot resolve a query from the notices.