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Home / De-Voil / Part V3 Supplies, acquisitions and imports / Division V3.1 Supplies / The value of supplies / V3.156 Value—apportionment of consideration
Commentary

V3.156 Value—apportionment of consideration

Part V3 Supplies, acquisitions and imports

Where a supply of any goods or services is not the only matter to which a consideration in money relates, the supply is that part of the consideration, which is properly attributable to it1. Where the separate elements of a multiple supply2 are taxed at different rates, it is necessary to apportion the consideration (where the supplier fixes tax-inclusive prices) or attribute a separate value to each element (in other cases) to calculate the correct tax. There is currently no prescribed method of apportionment but HMRC suggests two practical methods3:

  1. Ìý

    •ÌýÌýÌýÌý split the consideration according to the cost of supplying each element4, or

  2. Ìý

    •ÌýÌýÌýÌý use the market value of each element. This method was used in Jarmain5. HMRC states that the market value is the price a customer would normally pay for that supply6

HMRC considers that publishing practical guidance on apportionment methods is an effective way of addressing compliance risks. HMRC guidance regarding apportionment is included in the following documents,

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Web page updated on 24 Aug 2024 13:49