VAT (Education) (Hansard, 19 January 1988)

§ Mr. Michael Marshall
To ask the Chancellor of the Exchequer how the value of staff time or secondments to either a city technology college or local education authority school is calculated for value added tax purposes.

§ Mr. Lilley
A taxable person who supplies such services free of charge and without conditions or contractual obligations is supplying free services which are outside the scope of the tax. If the recipient educational establishment pays for the services, the value for tax is the monetary consideration. If there were any form of obligation on the recipient (whether or not there were also a monetary consideration), this would be seen as a non-monetary consideration whose value for tax purposes would be the open market value of the services.

§ Mr. Michael Marshall
To ask the Chancellor of the Exchequer how the value of donation of computer 653W equipment by the manufacturer or user to either a city technology college or local education authority school is calculated for value added tax purposes.

§ Mr. Lilley
If a taxable person donates equipment without conditions or contractual obligations, the value for tax is the cost of the equipment—that is, either the price at which the donor bought it or the full cost of its manufacture by him. If, however, there were any form of obligation on the recipient of the donated equipment, this would be seen as a non-monetary consideration and the value for tax would be the open market value of the equipment.

§ Mr. Michael Marshall
To ask the Chancellor of the Exchequer how the value of donation of computer software by the author or user to either a city technology college or local education authority school is calculated for value added tax purposes.

§ Mr. Lilley
A taxable person who donates, without conditions or contractual obligations, computer software which has been individually commissioned by the recipient educational establishment is supplying free services which are outside the scope of the tax. The donation of other software is a supply, the value of which for tax purposes is the cost—that is, either the price at which the donor bought the software or the full cost of its production by him.
If, however, there were any form of obligation on the recipient of the donated software (whether the latter were individually commissioned or not) this would be seen as a non-monetary consideration and the value for tax would be the open market value of the goods or services involved.