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:
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•ÌýÌýÌýÌý split the consideration according to the cost of supplying each element4, or
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•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
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Web page updated on 24 Aug 2024 13:49