EUROPEAN COURT RULES AGAINST HMRC ON VAT FOR PROMOTIONAL SAMPLES
11 October 2010
Businesses that offer free promotional samples may be entitled to a VAT rebate following a decision by the European Court of Justice.
EMI routinely distributes free copies of music recordings for promotional purposes and argued this was a method used to test products in the marketplace. HMRC argued that EMI should pay VAT on the cost of each free sample given, amounting to £3.3 million between 1987 and 2003. However, the court found in favour of EMI and the firm could now put in VAT reclaims for the overpaid amount.
For full details of the case, click here.