Revenue Note for Guidance
This section covers the tax treatment of goods supplied free of charge. The general rule is that self-supplies and intra-Community transfers of taxable goods are deemed to be supplied for consideration, which means that they are subject to VAT. There are exceptions. Gifts worth €20 or less and advertising goods, industrial samples and suchlike that are given free to customers in reasonable quantities are not taxable.
“Self-supplies” and intra-Community transfers of goods are deemed to be made for consideration in the course or furtherance of business to enable them to be subjected to a VAT charge. There are exceptions to the rule for:
The section does not apply to a “series or succession of gifts” made to the same person. This is to stop someone circumventing the provision by breaking the supply up into a series of small gifts below the threshold.
(Also see section 108 on inspection and removal of records, under which an officer can request a trader to provide details on gifts and promotional items supplied.)
Relevant Date: Finance Act 2019