Dixons Carphone Plc v Revenue & Customs (VAT - CONSIDERATION : Discounts) [2018] UKFTT 557 (TC) (25 September 2018)

Dixons Carphone Plc v Revenue & Customs (VAT - CONSIDERATION : Discounts) [2018] UKFTT 557 (TC) (25 September 2018)

LaSer does not provide consideration for the supply of goods by DSG to customers; the payment by LaSer is made on behalf of the customer under the credit agreement, and the Subsidy deducted by LaSer is not a reduction in the consideration for the supply of goods but is consideration for a separate supply by LaSer to DSG (the provision of uncommercial credit facilities at DSG's request). Therefore, the taxable amount for VAT purposes is the full amount due from the customer, and the Subsidy does not reduce the taxable amount.

Citation
[2018] UKFTT 557 (TC)
Parties
Appellant: Dixons Carphone Plc; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
25 September 2018
Procedural Posture
VAT Appeal / First Tier Tribunal (tax) Decision
Outcome
Appeal dismissed
Legal Topics
VAT Consideration, Supply of Goods, Third Party Payments, Retail Schemes, Credit Facilities, Contract Interpretation
Tax Law European Union Law VAT Consideration Supply of Goods Third Party Payments Retail Schemes Credit Facilities Contract Interpretation

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Parties

Dixons Carphone Plc

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Appeal / First Tier Tribunal (tax) Decision

Legal Issues

  1. 1 Whether the 'Subsidy' deducted by LaSer is part of the consideration for the supply of goods by DSG for VAT purposes
  2. 2 Whether the reduction in payment to DSG amounts to a reduced consideration for VAT purposes

Ratio Decidendi

LaSer does not provide consideration for the supply of goods by DSG to customers; the payment by LaSer is made on behalf of the customer under the credit agreement, and the Subsidy deducted by LaSer is not a reduction in the consideration for the supply of goods but is consideration for a separate supply by LaSer to DSG (the provision of uncommercial credit facilities at DSG's request). Therefore, the taxable amount for VAT purposes is the full amount due from the customer, and the Subsidy does not reduce the taxable amount.

Court Disposition

Appeal dismissed

Orders

  • The appeal by Dixons Carphone Plc is dismissed.