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Archived Directive 2006/112/EC (that is, the VAT Directive as it stood at Brexit IP completion day¹, and from which UK valuation legislation was derived) provides that the 'taxable amount' (ie value) must not include price discounts and rebates allowed to customers and obtained by them at the time of supply². This provision is not reflected in UK legislation but apparently had 'direct effect'.

'Discounts and rebates' for this purpose constitute a reduction of the price at which an article is lawfully offered to the customer. The amount of a discount or rebate is the difference between the normal selling price and the consideration actually received, see Boots Co plc³. (A rebate is the return of part of a payment; see Co-operative Retail Services Ltd⁴.) Where the discount or rebate extended to 100% of the cost of supplying goods (under a voucher scheme), the disposal is free of charge, and therefore