The Twelve Days of Christmas - some seasonal VAT advice

06 December 2021

This time of year often throws up some tricky tax issues as our clients push to close things off before the holidays. We thought we’d share this exchange between our VAT team and a long-standing client looking for some uniquely seasonal advice.

“Dear JC VAT team

I wonder if I could ask you to help with the following. To celebrate a wonderful year with a new friend, I’m looking to put together a VERY special series of gifts over the next twelve days. As a conscientious taxpayer, I want to make sure I fully understand the VAT consequences – can you advise by return?

Yours festively

M I Truelove”


"Dear Mr Truelove

Thank you for your letter – I am happy to advise on the VAT treatment of your truly unique Christmas gift. Whilst I understand that each gift will be provided on several successive days, for simplicity’s sake I have considered each gift only once.

On the first day
Partridges are generally accepted as edible, so this should be zero-rated. The same treatment should apply to the pear tree, unless it is ornamental, in which case VAT will apply. Of course, if you are sending your friend a warm take-away partridge, it will be standard rated, unless they eat in, in which case the special reduced rate for hospitality may apply. I’m sure that’s clear….

On the second day
I’m not sure whether turtle doves are normally eaten in the UK – perhaps you could confirm whether your friend regularly dines on them? HMRC do treat racing pigeons as standard rated and I would be inclined to apply the same treatment here.

On the third day
I note that the hens are French. You should at all costs avoid registering for VAT in France, as the rules are even more complicated than ours. You should also consider the impact of Brexit – I would be happy to advise, but it keeps changing. Don’t forget the new rules on importing animal products….

On the fourth day
I’m afraid I’m unclear as to what a calling bird is but would refer you to my earlier comments on racing pigeons. It may be that you intend to give your friend the gift of digital birdsong – if this is the case I would be happy to advise separately and at great length and complexity on the place of supply rules for digital services.

On the fifth day
Don’t give gold. The VAT treatment of gold is nightmare – it could be anything and you’ll probably get it wrong, incurring substantial penalties. If your friend wants something shiny, I’d suggest stainless steel. Or aluminium. Anything but gold.

On the sixth day
Zero-rated if they’re edible geese, although six is a lot – is your friend an Olympic weightlifter? Standard rated if they’re those big hissy geese people keep instead of guard dogs. The eggs will be zero-rated, assuming they’re edible – perhaps you could confirm?

On the seventh day
I think it’s now illegal to eat swans, so I’m going with standard rated on this one. You may also want to provide a pond for them to go a-swimming in – standard rated unless provided as part of a new build house, when it could be zero-rated. A very generous gift, but a VAT saving on the pond. At least the water will be zero-rated, unless it’s from a bottle – but that could cost you a lot in plastic packaging tax.

On the eighth day
A tricky one, this. A supply of maids is a standard rated supply of staff, but the milking introduces the possibility of a mixed liability supply or even zero-rating. You might also want to consider the agricultural flat rate scheme – but not for long, or you’ll fall asleep.

On the ninth day
Will the ladies be providing your friend with dance training, like on Strictly? If not, you may wish to consider this option as it introduces the possibility of VAT exemption and a very worthwhile tax saving.

On the tenth day
'Lord leaping' sounds like a sporting activity, although I’m not sure it is currently on HMRC’s list of approved sports for VAT exemption. It may be worthwhile applying for a clearance as I would imagine the cost of ten leaping lords for three days is considerable.

On the eleventh dayI
’m not clear whether the pipes referred to here are musical or industrial. If the latter, my colleagues in Aberdeen have considerable experience in advising on the VAT and Customs Duty implications of supplying pipes to the offshore industry. If this is relevant, perhaps you could also confirm whether your friend resides on a fixed or floating rig, inside or outside the 12 mile limit?

On the twelfth day
The place of supply rules for cultural services are horribly complex – could you confirm where the drummers are from, where they will be drumming and whether your friend is carrying on any form of economic activity? I can then have a go at advising on the correct VAT treatment. Things have gotten worse since Brexit of, course – we’ll need to think about the new One Stop Shop rules… but only after a few glasses of Port.

I trust this is helpful in setting out the VAT treatment of your extraordinary gifts to your friend. Please do let me know if we can be of further assistance?

Yours seasonally

The JC VAT team"


"Dear JC VAT team

Thank you for your letter regarding the VAT treatment of my proposed gifts to my friend. I must admit, I hadn’t realised things would be so complex – I thought VAT was a simple tax…

After due consideration, I’ve decided to get my friend an Amazon voucher this year. I’m sure it’s what they really want.

Have a wonderful Christmas.

Yours confusedly

M I Truelove"

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