Medals incur VAT

The Scottish Football League (SFL) awarded medals to the champion team of each division. The total value of was £27 000.

Input tax was not be claimed on the medals for several years on the basis the organisation did not have to account for output tax once the decorations were presented.

The SFL decided in 2010 that input tax should be allowed but output tax was not due because the medals were a contracted award as opposed to a gift. HMRC did not allow the claim.

The taxpayer’s appeal before the First-tier Tribunal was dismissed on the ground the medals constituted a business gift.

The matter escalated to the Upper Tribunal which said it was irrelevant whether or not the supply of medals had been a business gift. The awards formed part of the assets of the SFL’s business and once presented were no longer part of those...