VAT notice 700/7 states a business must account for VAT on business gifts where the following apply:
- the total cost of business gifts given to the same person in any 12-month period exceeds £50
- you were entitled to claim the VAT on the purchase as input tax
If client gives a UK customer free goods, having reported purchases from Germany under reverse charge, is that an entitlement to claim the input tax for this purpose?
Sense tells me he needs to account for output tax, but just checking before breaking the news.