VAT on third party funded promotions, VAT due?

VAT on third party funded promotions, Is VAT due on the full value?

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Hi,

Looking for some advice on how to account for VAT on a promotional scheme.

Residential homeowner receives an energy saving device that is 50% subsidised by a third party, with no tie-in or contract.

Device manufacturer charges end customer £100+VAT for a product that normally sells for £200+VAT. 

 The third party subsidises the cost by paying the remaining 50% to the manufacturer but actually received nothing themselves.

What's the VAT? Is the contribution by the third party VAT free because they're not receiving anything, or does VAT have to be accounted for on the normal sale value, or perhaps on the cost price?

Thanks

 

Replies (1)

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chips_at_mattersey
By Les Howard
24th Feb 2022 16:17

Who is doing what for whom?
Seller supplies gadget to householder.
Value of supply is total amount received from householder plus funder, and VAT due on full amount.

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