Valuation ― basic principles

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note considers some of the basic principles associated with valuing supplies for VAT purposes, namely:

•
how to value supplies when consideration is wholly in money
•
how to value supplies where the consideration is not wholly in money
•
issues related to whether amounts are inclusive of exclusive of VAT

For an overview of valuation for VAT more broadly, see the Valuation ― overview guidance note.

In-depth commentary on the legislation and case law is provided in De Voil Indirect Tax Service V3.151.

Valuing supplies when consideration is wholly in money

Often consideration for a supply will be given exclusively in money (‘consideration’ is broadly synonymous with payment but see the Supply and consideration ― is the supply for consideration? guidance note for further details).

Where consideration is wholly in money, then the value of the supply for VAT purposes is the amount which, with the addition of VAT, is equal to the consideration. This is easier to understand with the aid of numbers. For example, if a person gives consideration

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Popular Articles

Owner-Managed Businesses

Definition of a close company

Definition of a close companyThe detailed definition of a close company is set out below, but in summary the rules are targeted at those companies where the owners can manipulate the activities of the company to influence their own tax position. Therefore, broadly speaking, in most cases an

14 Jul 2020 11:24 | Produced by Tolley Read more

Owner-Managed Businesses

Bad debts

Bad debtsBad debts usually arise where goods or services have been provided to a customer, for which payment has not been received within a reasonable or specified time period, or for which the customer is unable to pay. It is necessary to determine the quantum of relief that can be claimed for bad

14 Jul 2020 15:34 | Produced by Tolley Read more

Value Added Tax

Exemption ― burial and cremation

Exemption ― burial and cremationThis guidance note provides an overview of the VAT treatment of services that are provided in connection with the burial or cremation of human remains.VAT treatmentThe following services are exempt from VAT:•the disposal of the remains of the dead•making arrangements

14 Jul 2020 11:38 | Produced by Tolley Read more

UU��ֱ��