Value Added Tax Act 1994

5 (1) Subject to sub-paragraph (2) below, where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, that is a supply by him of goods.

(2) Sub-paragraph (1) above does not apply where the transfer or disposal is—

(a) a gift of goods made in the course or furtherance of the business (otherwise than as one forming part of a series or succession of gifts made to the same person from time to time) where the cost to the donor is not more than [F1 £15];

(b) subject to sub-paragraph (3) below, a gift to any person of a sample of any goods.

(3) Where—

(a) a person is given a number of samples by the same person (whether all on one occasion or on different occasions), and

(b) those samples are identical or do not differ in any material respect from each other,

sub-paragraph (1) above shall apply to all except one of those samples or, as the case may be, to all except the first to be given.

(4) Where by or under the directions of a person carrying on a business goods held or used for the purposes of the business are put to any private use or are used, or made available to any person for use, for any purpose other than a purpose of the business, whether or not for a consideration, that is a supply of services.

(5) Neither sub-paragraph (1) nor [F2 sub-paragraph (4) above] shall require anything which a person carrying on a business does otherwise than for a consideration in relation to any goods to be treated as a supply except in a case where that person is entitled under sections 25 and 26 to credit for the whole or any part of the VAT on the supply, acquisition or importation of those goods or of anything comprised in them.

(6) Anything which is a supply of goods or services by virtue of sub-paragraph (1) or (4) above is to be treated as made in the course or furtherance of the business (if it would not otherwise be so treated); and in the case of a business carried on by an individual—

(a) sub-paragraph (1) above applies to any transfer or disposition of goods in favour of himself personally; and

(b) [F2 sub-paragraph (4) above]applies to goods used, or made available for use, by himself personally.

[F3 (7) The Treasury may by order substitute for the sum for the time being specified in sub-paragraph (2)(a) above such sum, not being less than £10, as they think fit.]

Textual Amendments

F1 Words in Sch. 4 para. 5(2)(a) substituted (29.4.1996 with application where a gift is made after 28.11.1995) by 1996 c. 8, s. 33(1)(4)

F2 Words in Sch. 4 para. 5(5)(6)(b) substituted (retrospectively) by 1995 c. 4, s. 33(3)(a)

F3 Sch. 4 para. 5(7) inserted (29.4.1996) by 1996 c. 8, s. 33(2)