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Business Tips

Can I reclaim VAT on gifts?

There are some very specific rules in relation to business gifts and the VAT on them.

A business gift is a gift made in the course of business.  This can include things such as business advertising and brochures, ‘executive gifts’ or even long service awards.

VAT is recoverable on such business gifts and output VAT does not need to be accounted for as long as the total value of all gifts does not exceed £50 (excluding VAT), given to the same person in any 12 month period.

If this limit is exceeded and input tax is reclaimed, VAT will need to be accounted for on the value of the gift.

The VAT on any gifts for non-business purposes, such as a gift to a friend or relative, should not be recovered.

Other rules apply to specific gifts, such as promotions of sporting activities, gifts to charities, gits to the general public, samples or gifts as part of a business promotion.  In these cases the specific VAT treatment may differ.

For more information in relation to VAT, please contact Wisteria’s tax team on 020 8429 9245.

Please note that the above does not constitute specific advice.  You are always advised to consult an expert before relying on any information.