Supply and consideration ― donations and sponsorship

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note looks at donations and sponsorship for VAT purposes. In particular, it considers when a payment will be consideration for a supply and therefore potentially within the scope of VAT.

For an overview of supply and consideration generally, see the Supply and consideration ― overview guidance note.

For detailed commentary on the legislation and case law, see De Voil Indirect Tax Service V3.104.

Is a donation consideration for a supply?

If a monetary donation is freely given and the donor does not expect to receive anything in exchange, it will not be viewed as consideration for any supply. The payment is outside the scope of VAT and therefore no VAT needs to be accounted for by the person receiving the donation.

HMRC has suggested the following questions will be relevant when seeking to establish whether a donation is unconditional / freely given:

Question	Significance
Does the donor receive anything in return for the payment?	If the donor receives something in return this suggests the donation may in fact be consideration

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Trusts and Inheritance Tax

Tax on UK resident beneficiaries of non-resident trusts ― overview

Tax on UK resident beneficiaries of non-resident trusts ― overviewIntroductionUK resident beneficiaries of non-resident trusts are subject to UK tax on payments or benefits received from the trust. They are liable for income tax on income distributions from the trust and they may also be liable to

14 Jul 2020 13:47 | Produced by Tolley Read more

Autumn Budget 2024

Personal Tax

Interest and penalties on late paid tax under self assessment

Interest and penalties on late paid tax under self assessmentInterestIf the capital gains tax, the balancing payment or payments on account of tax and / or Class 4 national insurance contributions (NIC) are paid late, HMRC will charge interest on the amount overdue from the original due date. The

14 Jul 2020 12:00 | Produced by Tolley Read more

Owner-Managed Businesses

Capital allowances on cars

Capital allowances on carsSummary of capital allowances on carsThe current capital allowance rates applicable to cars are as follows:Pool typeDescription of carRateLegislationMain rate poolNew and unused cars with CO2 emissions of 50g/km and below 18%CAA 2001, s 104AASecondhand cars with CO2

14 Jul 2020 11:08 | Produced by Tolley Read more

Autumn Budget 2024

UU��ֱ��