Part 2

Value added tax

Business gifts
21
1
In Schedule 4 to the Value Added Tax Act 1994 (matters to be treated as supply of goods or services), paragraph 5 (business gifts etc) is amended as follows.
2
In sub-paragraph (2) (cases where sub-paragraph (1) does not apply), for paragraph (a) substitute—
a
a business gift the cost of which, together with the cost of any other business gifts made to the same person in the same year, was not more than £50.
.
3
After that sub-paragraph insert—
2ZA
In sub-paragraph (2) above—
- “business gift” means a gift of goods that is made in the course or furtherance of the business in question;
- “cost”, in relation to a gift of goods, means the cost to the donor of acquiring or, as the case may be, producing the goods;
- “the same year”, in relation to a gift, means any period of twelve months that includes the day on which the gift is made.
.
4
This section applies in relation to gifts made on or after 1st October 2003.