Commentary

V3.104B Examples of transactions which have been held to amount to supplies for consideration

Part V3 Supplies, acquisitions and imports

V3.104B Examples of transactions which have been held to amount to supplies for consideration

V3.104B Examples of transactions which have been held to amount to supplies for consideration

The following transactions have been held, or are considered by HMRC, to amount to supplies for consideration:

  1.  

    •     building regulation fees payable to a local authority1

  2.  

    •     the payment of compensation to a taxable person upon his handing over of handguns (which it would shortly become illegal to own)2

  3.  

    •     compensation payments made to processors of dried animal fodder3

  4.  

    •     a promise made, action done, or payment made, under a legally binding agreement4. In Vodafone Portugal5, the taxpayer entered into agreements with its customers for the provision of telephone services. One such agreement involved a 'tie in period' under which customers committed to maintaining a contractual relationship with the taxpayer for a certain period in return for commercial benefits (eg discounts and 'free' installation services). The agreement provided that, should a customer fail to comply with the tie-in period for reasons of its own, it would be required to pay an amount provided for in the contract. This amount, under Portuguese law, did not necessarily correspond to the amount which would have been payable had the agreement run as intended; it could also include the costs relevant to the commercial benefits. The taxpayer argued that the amount payable in

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