Trade Samples – VAT Treatment Change | DFA Law Solicitors Northampton News

If your business has followed the common practice of giving trade samples, your VAT returns will have been prepared on the basis that a single sample could be supplied to a person as a VAT-free supply but where a larger number of samples was given, output tax was payable.

Recently, HM Revenue and Customs have accepted that a decision of the European Court of Justice means that all trade samples supplied are VAT-free. Accordingly, where output tax has been paid on samples supplied, the VAT is recoverable subject to the usual time restrictions.

Full details are contained in HMRC Brief 51/10. It should be noted that the treatment applies only to trade samples, not to trade gifts, which continue to be taxable.