As a result of a recent option by the Advocate General some businesses may be able to reclaim VAT previously declared on business gifts.
The actual judgement of the European Court of Justice in the case of EMI Group C-581/08 is expected in a couple of months. The AG has so far found that the UK is not treating VAT on gifts correctly.
Where a business has declared VAT on gifts in excess of £50, or when a series of gifts have been made to the same person over the last four years it should consider making a protective claim.
Source: reported by Smith & Williamson in the ICAEW’s Taxline.
