Andrew Needham looks at how to account for VAT on special offers.
Normally, VAT is due on the price charged if that is the only consideration received. In the case of ‘trade-ins’, the value of the trade-in should also be taken into account.
But what happens when a business has a special offer and provides free goods or services?
‘Free’ goods or services
A business can offer ‘buy one get one free’ (BOGOF), ‘13 for the price of 12’ or ‘buy a sofa and get a free footstool,’ and HMRC accepts the deal is for an all-in price. The only complication is if it has to be apportioned where the goods are subject to different rates of VAT.
For example, an attractive biscuit tin was held to be simply packaging required for a presentation box of biscuits; the possibility of subsequent use did
