FW: VAT refunds on samples and gifts

 

 

Andrew Cawkwell

Partner

Watson Burton LLP

_________________________________

direct dial:  +44 (0)191 244 4338

office no:    +44 (0)191 244 4444

fax no:         +44 (0)191 244 4500

mobile:        +44 (0)7973 502809

_________________________________

Linked in Profile: http://uk.linkedin.com/in/andrewcawkwell1

Join North-East and Yorkshire Company Directors Forum: http://www.linkedin.com/groupRegistration?gid=2287271

Join North-East and Yorkshire Insolvency Professionals Group: http://www.linkedin.com/groupRegistration?gid=2223800

 

---

From: Billy Cairns [mailto:vat@pkf.org.uk]
Sent: 18 May 2010 14:51
To: Andrew Cawkwell
Subject: VAT refunds on samples and gifts

If you cannot view this email correctly, please follow this link:

http://pkf.org.uk/ve/ZZ31j00Z81Sjs74308

www.pkf.co.uk VAT News - May 2010 VAT refunds on samples and gifts Download our briefing to see if you can claim a refund Online VAT filing and payment Download our briefing one of the key 2010 VAT changes Taxation services Find out more information about our Taxation services Forward to a friend Forward this email to a friend or colleague Click here for a printable version Dear Andrew,   Can your business claim VAT refunds on business samples and gifts?   An announcement from the European court is good news for businesses hoping to recover VAT overpaid on goods distributed as business gifts and trade samples.   For advice on claiming a VAT refund, please get in touch with your local PKF VAT contact.   Background The current UK rules effectively impose a VAT cost on many trade samples and business gifts that a business distributes. Beyond tight limits (see below), a business must pay VAT to HMRC on the value of gifts and samples at the time they are given away for free. In practice, many businesses instead opt not to claim the input VAT paid on items purchased for use as gifts and samples.   The EMI Group case In an appeal brought to the European Court of Justice (ECJ), EMI has argued that UK law has defined samples and business gifts too restrictively. This view has been broadly supported by the Advocate General, whose written opinion is used as a brief by the ECJ to consider when making its final ruling.   Business gifts Until now, the UK has only allowed input VAT to be claimed on business gifts with no corresponding output VAT charge, provided the item cost £50 or less. However, the law specifically excludes a series or succession of gifts to the same person that exceeds £50 in total during a 12 month period. The Advocate General agrees that the UK is entitled to set a value limit on gifts but believes it cannot apply a limit to a series of gifts given over a period of time.   Trade samples The Advocate General also disagrees with HMRC's view that VAT relief can only apply to the first sample given to a particular person. His opinion indicates that samples may be given out VAT-free in a quantity that is sufficient for them to achieve their purpose as samples, but no more than that.   This would mean that businesses could claim VAT relief on a reasonable number of samples – based on the individual circumstances of each business.   Opportunity for claims If the final ECJ judgment (expected summer 2010) confirms the Advocate General's view, UK businesses may be able to claim refunds of VAT previously under-claimed or overpaid under HMRC's rules. This is good news for many of the businesses who submitted historic claims following the Fleming case and for those with new claims covering the past four years.   What should you do now? If your business spends significant amounts on samples and business gifts, speak to your local PKF VAT contact to consider the viability of a claim.      Kind regards, Billy Cairns Email: billy.cairns@uk.pkf.com Tel:      0113 228 4137            PKF (UK) LLP, Pannell House, 6 Queen Street, Leeds LS1 2TW   www.pkf.co.uk LINKS DOWNLOADS PKF London homepage VAT homepage VAT refunds on gifts and samples.pdf (198.11 kb) VAT online filing and cheque payments.pdf (203.26 kb) FEEDBACK Please submit any comments or questions using the box to the right. Copyright (c) PKF (UK) LLP May 2010. All rights reserved. The items contained in this email and any attachments have been prepared as a general guide.   Neither PKF (UK) LLP nor its partners or employees accept any responsibility for loss or damage incurred as a result of acting or refraining from acting upon anything contained in or omitted from this document.   PKF (UK) LLP is a limited liability partnership registered in England and Wales with registered number OC310487. A list of members is available at Farringdon Place, 20 Farringdon Road, London, EC1M 3AP, the registered office. Certain of the services described in this document may be provided through PKF Financial Planning Limited. Both PKF (UK) LLP and PKF Financial Planning Limited are authorised and regulated by the Financial Services Authority for investment business and insurance mediation activities.   PKF (UK) LLP is a member firm of the PKF International Limited network of legally independent firms. PKF (UK) LLP does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.   PKF (UK) LLP operates a code of conduct to ensure that all types of data are managed in a way which complies with the Data Protection Act 1998. If you do not wish to be informed about the services we offer and forthcoming events, please contact your local office. To opt-out from future communications, please visit: http://pkf.org.uk/vtu/ZZ31j00Z81Sjs74308

------------------------------------------------------------------------------------------------ WATSON BURTON LLP  1 St James' Gate, Newcastle upon Tyne, NE99 1YQ | Tel: +44 (0) 191 244 4444 | Fax: +44 (0) 191 244 4500 1 City Square, Leeds, LS1 2ES | Tel: +44 (0) 113 235 5455 | Fax: +44 (0) 113 235 5450 Floor 29, 30 St Mary Axe, London EC3A 8BF | Tel: +44 (0) 20 7337 8300 | Fax: +44 (0) 20 7337 8350 enquiries@watsonburton.com | www.watsonburton.com  ------------------------------------------------------------------------------------------------ Confidentiality:    This email and its attachments are intended for the above named only and may be confidential. If they have come to you in error you must take no action based on them, nor must you copy or show them to anyone;  please reply to this email and highlight the error. Quality Control:    It is the policy of this firm to review and approve outgoing communications using a process  of tiered authority. Please note that the originator of the above message may differ from the ultimate sender as a  result of this process. Security Warning:    Please note that this e-mail has been created in the knowledge that Internet e-mail is not a  100% secure communications medium. We advise that you understand and observe this lack of security when e-mailing us. Viruses:    Although we have taken steps to ensure that this email and attachments are free from any virus, we  advise that in keeping with good computing practice the recipient should ensure they are actually virus free. Watson Burton LLP is a limited liability partnership, registered in England with registered number OC306105. A list of members' names is available for inspection at the registered office,  1 St James' Gate, Newcastle upon Tyne, NE99 1YQ. ------------------------------------------------------------------------------------------------ Consider the environment.  Please do not print this email unless essential.