Sponsor logos on event cups: how HMRC treats sponsorship for VAT

Print space on a reusable cup is one of the things an event organiser can offer a sponsor, and this site's revenue generators page lists sponsor opportunities as selling premium print space to sponsors and partners. HMRC has a notice on how VAT treats sponsorship. This article sets out what that notice says, how it values a sponsor's payment in goods, and what to settle before the artwork goes to print. It states what HMRC's guidance says and does not decide the position of any particular deal.

What HMRC means by sponsorship

VAT Notice 701/41 defines sponsorship as a payment to a charity, social project or a business for which the sponsor receives something in return. The payment may be money, goods and services, or a combination. The notice says payments may be described as something else, for example a donation, and that where the sponsor also receives something in return this may have VAT implications.

It says a person who gets sponsorship will normally be making a supply to the sponsor. It adds that even if your other taxable supplies would otherwise be below the VAT registration limits, you may become liable to register because of your sponsorship income. A sponsor who gives sponsorship in goods or services rather than money may also be making taxable supplies.

When the notice treats it as a taxable supply

Paragraph 2.1 says that where you get sponsorship you will normally be making taxable supplies if, in return, you are obliged to give the sponsor a significant benefit. The examples include:

- naming an event after the sponsor, where that gives the sponsor a business benefit such as promoting their brand - displaying the sponsor's company logo or trading name, though not where the logo is purely connected with a government agency or charitable foundation and merely acknowledges generosity - participating in the sponsor's promotional or advertising activities - allowing the sponsor to use your name or logo - giving free or reduced price tickets - allowing access to special events, and providing entertainment or hospitality facilities

The notice says the list is not exhaustive and that what matters is that the agreement or understanding requires you to do something in return. In our reading, a sponsor's logo printed on the cups an event hands out is an instance of displaying the sponsor's logo, and providing hospitality facilities is a further item on the same list. Whether a given agreement is a taxable supply depends on its terms, which is for the organiser and an adviser, or HMRC, to decide.

What the notice leaves outside VAT

Paragraph 2.2 says donations and gifts that are freely given and secure nothing in return are outside the scope of VAT, and that a taxable supply is not created where you provide an insignificant benefit such as a minor acknowledgement of the source of the support. Its examples include giving a flag or sticker, acknowledging the donor in a list of supporters in a programme or on a notice, and giving a certificate which acknowledges a donation.

Paragraph 2.3 covers a mix of sponsorship and donation. If a donation is made separately from the sponsorship agreement, or the agreement makes clear which part is payment for services and which is a donation, you need not account for VAT on the donation. The notice says it must be clear that the benefits the sponsor receives are not conditional on the donation.

Valuing the sponsorship

Paragraph 3.1 says that where you make taxable supplies in return for sponsorship you must account for VAT on a value that covers everything you get under the agreement. If you agree the amount without allowing for VAT, you must treat the amount received as VAT inclusive. The notice sends you to the VAT guide for valuing supplies paid for in kind.

The VAT guide, Notice 700, explains in paragraph 7.4 that where the consideration is not in money, as in a barter transaction, the tax value of the supply is the monetary equivalent of the consideration, which is the open market value. It says this is normally worked out by reference to the price excluding VAT that a customer would have to pay for the supply if money were the only consideration. Paragraph 8.7 says that where you supply services and receive goods or services in payment, two separate supplies take place, and both parties must account for VAT if the customer is a taxable person. In our reading, a sponsor who pays for the cup run itself, in exchange for its logo on the cups, is a case of payment in kind that these paragraphs address.

Other points in the notice

Paragraph 3.4 says you must issue a VAT invoice to a sponsor that is registered for VAT, and that a sponsor providing sponsorship in the form of taxable supplies of goods or services must also issue one. Paragraph 3.3 says supplies of advertising and publicity to overseas sponsors may be outside the scope of UK VAT, and points to the place of supply guidance. Paragraph 3.2 says a charity making supplies to sponsors as part of a fund raising event may find its supplies exempt, and points to HMRC's guidance on charity fundraising events. Paragraph 2.4 says a sponsor that gives goods as a gift or donation may be liable to account for VAT under the business gift rules, which our guide to promotional cups as business gifts covers.

Before the artwork is approved

It is sensible to settle three things in writing with the sponsor: what the sponsor receives, including the print space and any hospitality, what the sponsor gives, and whether the sum agreed includes VAT. Our guide to permission to print a logo covers the other half, the sponsor's consent to the use of its mark. On the cup side, the reusable event cups range is printed in one colour or full colour from 50 cups per design, and the promotional cups page covers the formats. The team checks the artwork before production. Ask for a quote with the sponsor placements you have in mind.

Where this stands

This was checked on 1 October 2026. VAT Notice 701/41 was last updated on 8 May 2019 and is the oldest page cited here, so it is worth confirming against the live notice before a contract is signed. VAT Notice 700 was updated on 25 June 2026. Both are HMRC guidance and not the legislation, and neither was checked for thresholds or rates, which are not repeated in this article.