Commentary

V7.417 Supply—sale or return

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.417 Supply—sale or return

Part V7 Tax planning | Commentary

V7.417 Supply—sale or return

This situation arises when a customer receives goods from a supplier – but the supplier retains ownership of the goods until the point when the customer adopts them. In effect, this means the customer has the right to return them at any time.

A common example of where this type of supply may occur is when a manufacturer provides a demonstrator product to a retail outlet – allowing the latter to display the goods in his shop and show the benefits to potential customers.

The main rules to remember with supplies on sale or return are as follows:

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