HMRC published a consultation – which closed on 30 March – on a proposed revision of the rules for apportioning the consideration between supplies with mixed liabilities in a single transaction.

The current law – in section 19(4), Value Added Tax Act 1994 (VATA 94) – is non-prescriptive and some businesses pay less VAT by apportioning more consideration (or ‘shifting the value’) to non-standard rated items. Businesses were encouraged to

• Comment on how these can be written into UK law
• Draw attention to any issues the new rules present
• Highlight whether greater clarity is required in some areas
• Suggest other ways to tackle value shifting.

This consultation was of particular interest to businesses that sell goods or services for a reduced price as part of a package or ‘bundle’.

Following consultation with its charity and professional members, CTG submitted a detailed response to HMRC.

VAT and value shifting consultation – CTG response (30 March 2021)