Section 21 — Finance Act 2003: Business gifts

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.