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In Marks and Spencers plc v HMRC [2018] TC06471, the First-Tribunal (FTT) found that the free wine in the 'dine in for £10' offer is not a gift and part of the cost of the deal must be standard rated.

The M&S Promotional scheme entitled customers to a main, side, and dessert, with a free bottle of wine for £10.

The FTT found in favour of HMRC:

Even if there was not a supply of wine for consideration, the FTT concluded there would still be a deemed supply for VAT as it was a transfer out of business assets. It was not a gift, so the Gift exemption does not apply. This deemed supply has to be given a value, which would then trigger a VAT charge at the standard rate.

Had M&S won, the whole supply would have been zero rated and the wine would have been treated as having been supplied for nil consideration.

Links

Food: catering and takeaway

Discount, Reward Schemes & Vouchers: VAT

Gifts & samples - VAT repayment claims?

External link Marks and Spencers plc v HMRC [2018] TC06471


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