Consultation outcome VAT and value shifting

This consultation sought views on a proposal to legislation to mandate methods for apportioning the consideration when items with different VAT liabilities are supplied together for a single price as part of a package or bundle.

The proposal is designed to prevent those businesses that seek to exploit the current non-prescriptive rules by apportioning less of the total bundle price to products that are subject to VAT standard rate than appears to be justified, given the normal price a customer would pay for those items if sold individually.

HMRC is actively engaging with stakeholders to gain a fuller understanding of the range of views on the proposals set out in the consultation.

HMRC has contacted all respondents to fully discuss their concerns about the proposals and would also like to engage with other stakeholders to establish their views. To this end, further representations will be welcomed. As part of this engagement HMRC will keep under review the changes proposed in the consultation.