Mixed supplies of goods and services

Special rules apply where one or more goods and services are sold together for a single payment. This is relevant where each of those supplies is taxable at a different Value-Added Tax (VAT) rate. As a starting point, you must first decide whether you are making a multiple supply or a composite supply.

What is a multiple supply?

A multiple supply is where each of the items being sold together for one consideration is capable of being supplied individually in its own right. This means that each part of the supply is physically and economically dissociable from the other parts of the supply.

The consideration for a multiple supply must be apportioned between each of the individual supplies for the purposes of charging VAT.

What is a composite supply?

A composite supply consists of a principal element as well as an ancillary element, or elements, in the supply. In general, the ancillary elements would not be sold on their own without the principal element. The ancillary elements of a composite supply are not physically or economically dissociable from the principal supply.

In general, the total consideration for a composite supply is chargeable to VAT at the rate applying to the principal element.

Further guidance contains more detailed information on the VAT treatment of Mixed Supplies of Goods and Services.