Simple Energy Limited v The Commissioners for HMRC

Simple Energy Limited v The Commissioners for HMRC

The services provided by referrers under the RAF scheme, when they successfully referred new customers and earned a credit, amounted to non-monetary consideration. This consideration was part of the consideration for energy supplied to them by Bulb, and not merely a price discount or rebate. The direct legal link, contractual reciprocity, and subjective value ascribed by the parties satisfied the requirements for non-monetary consideration under VAT law.

Parties
Appellant: Simple Energy Limited; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
11 October 2024
Procedural Posture
Tax Appeal / First Tier Tribunal Judgment
Outcome
Appeal dismissed
Legal Topics
Value Added Tax, Non Monetary Consideration, Refer a Friend Schemes, Contractual Reciprocity, Price Discounts and Rebates
Tax Law Commercial Law Value Added Tax Non Monetary Consideration Refer a Friend Schemes Contractual Reciprocity Price Discounts and Rebates

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Parties

Simple Energy Limited

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Judgment

Legal Issues

  1. 1 Whether successful referrals by referrers under an energy supplier’s 'refer a friend' scheme amount to the provision of non-monetary consideration for energy supplied to them, or are merely price discounts/rebates.

Ratio Decidendi

The services provided by referrers under the RAF scheme, when they successfully referred new customers and earned a credit, amounted to non-monetary consideration. This consideration was part of the consideration for energy supplied to them by Bulb, and not merely a price discount or rebate. The direct legal link, contractual reciprocity, and subjective value ascribed by the parties satisfied the requirements for non-monetary consideration under VAT law.

Court Disposition

Appeal dismissed

Orders

  • The appeal is dismissed.