§ Mr. Simon CoombsTo ask the Chancellor of the Exchequer on what basis Customs and Excise assess liability for value added tax on the whole of a donation by a commercial company towards an advertisement by a charitable organisation, rather than on the value of that part of the advertisement which might be deemed to be promoting the company.
§ Mr. LilleyThere is no VAT liability on unconditional gifts of money, but where payments are conditional on a charitable organisation supplying clearly identifiable benefits in return, for example, advertising or publicity, such supplies are liable to VAT, and have to be accounted for at the standard rate by any charitable organisation whose taxable turnover exceeds the registration limits.