Simple Energy Ltd – FTT – Refer a friend scheme – whether £50 credit was a discount – no – taxpayer loss

• The case involves Bulb Energy Ltd, an energy supplier in the UK retail market.
• The dispute revolves around their ‘refer a friend’ scheme, where both the referrer and the new customer receive a £50 credit if the new customer signs up.
• The disagreement is over whether the £50 credit given to the referrer should be treated as a discount or as non-monetary consideration for services provided to Bulb.
• The First-tier Tribunal (FTT) referred to various cases that have explored the concept of supply and taxable amount.
• They also mentioned cases involving ‘discounts’ and found that in some cases, there was a direct link between the supply and the consideration received, while in others, no such link was found.

Source KPMG

See also

• C-154/80 (Coöperatieve Aardappelenbewaarplaats) – Clarification term “supply for consideration”: a “direct link” must exist between the supply and the amount received
• C-102/86 (Apple and Pear Development Council) – Compulsory payments, even in kind, cannot be easily considered as giving rise to onerous transactions
• C-16/93 (R. J. Tolsma) – A service is only provided “for consideration” if there is a legal relationship between the provider and the recipient of the service
• C-230/87 (Naturally Yours Cosmetics) – The taxable amount is a subjective value which must be capable of being expressed in monetary terms