Determining the value of consideration

A recent rash of cases shows that the value of taxable supplies for VAT purposes is still giving taxpayers and HMRC cause for consideration. Despite the judgment of the European Court of Justice in Elida Gibbs Ltd v Commrs of C&E (Case C-317/94) [1996] STC 1387 having been good law now for some 15 years, HMRC has attempted to limit the application of the principle rather than recognising a general approach of the courts that taxpayers should only pay VAT on the amount they actually end up receiving after redemption of coupons, rebates, discounts or other adjustments to consideration.