UK Taxes on Product Reviews

JoeSN

Dear Forum Users,

I was hoping someone might be able to provide more help that I got from the official gov websites !

I wish to enter a 'competition' to review a product. If successful out of the 1000's of global applicants they would send me a product and I would have to test it and review it....after that it is mine to keep.

The product is worth about $15,000 so I now assume taxes would be due if it arrived at my front door.

Would I be correct in thinking this could be:
20% VAT

In addition would the HMRC then think this is a taxable earning (swapping my time for something of monetry value). Would I then be required to pay an additional 20%/40% depending upon my own personal income level?

Are HMRC automatically notified by the customs paperwork that this has been sent to me and they generate the bill or do I need to contact them and state the amounts?

The company holding the reviews also has a UK based site - if they sent the product from there I guess I would not have to pay VAT as it would have already been paid when the product was shipped to the UK distribution warehouse.

I look forward to any help or comments,

regards

J

agrinnall

It's not a situation that I've ever heard of, but I suspect that you are right that VAT will be payable, and possibly import duties depending on what the product is.

Are you expected to be the importer of the item, or will it be imported by the UK arm of the company before delivery to you? If the former I would suspect that given the value you would have to arrange to make any payment that is due before you can collect it or have it delivered.

I wouldn't think there will be any income tax due as you aren't actually getting any income for doing the testing.

JoeSN

Thanks for your comments.

I'm not sure if the product would come directly from the USA or from the UK based warehouse. I'll ask them, as directly from USA does sound like I'd be doing an import (of a single item).

I can see what you mean about the income side...but if I did decide to see it then I'd be making money. I guess at that point I would be elligable for income TAX via a PAYE type declaration.

J

jimmo

No idea about VAT but for Income Tax, as this seems to be a one off item it seems likely that you will be taxable under the miscellaneous income provisions rather than trading. In practical terms this makes no real difference but perhaps makes it clearer that you will be taxable on any profit.
You may not receive any money for your work but you will receive money's worth and that will be your gross income.
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim40051
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim100150

I can't find a link which clearly defines money's worth but, from memory, it is the amount you could reasonably expect to sell the item for. In other words its second hand value.