Business promotion schemes ― manufacturer promotions

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note provides an overview of the business promotion schemes that can be used by manufacturer’s to generate sales.

For other types of promotion schemes, see the Business promotion schemes ― overview guidance note.

Manufacturer trade promotion schemes

Manufacturers often have trade promotion schemes in operation in order to encourage customers to purchase more of their premium products. Examples of the typical schemes that could be used by manufactures are provided below.

Vouchers and reward schemes

The manufacturer who is offering vouchers or reward schemes will typically either:

•
issue a voucher or other proof of purchase when the customer buys the premium goods which can be redeemed by the customer against a future purchase. As the customer can obtain goods without payment when the voucher is redeemed, the redemption goods are treated as a gift and the VAT treatment described in the Supply and Consideration ― business gifts and samples (deemed supply) guidance note should be applied
•
provide a trade reward scheme to customers who purchase a minimum amount in a single

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