V3.105 Composite/single supplies

V3.105 Composite/single supplies

Composite/single supplies—meaning

A composite, or single, supply has been defined as a supply in which there is a number of constituent elements, some of which, if supplied separately, would have been taxed, and some not (or taxed at different rates). The implication that a single supply is taxed at a single rate is not necessarily true; see 'Single supply—differing liability' below. It is necessary to determine the quality of the final composite or compound supply for tax purposes regardless of its constituent elements1. In fact, the distinction between a composite supply and multiple supplies may be of significance, not just in determining the tax liability, but also in respect of the place and time of supply. For example there may be a single tax point for a composite supply of goods, but multiple tax points if there are supplies of both goods and services (or multiple supplies of either)2. Similarly, there will normally be one place of supply for a composite supply of services; there may be several places of supply in the case of multiple supplies of services.

Clearly a taxpayer whose customers (whether direct or ultimate) are not able fully to recover any input tax charged to them is normally likely to argue that he is making a single supply where the amount of tax on that supply is less than it would be were the transaction(s) to be regarded as multiple supplies. For example, a food manufacturer might argue that he is making a single

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