VATVAL08600 – Special valuation provisions: other types of discount
- Types of Discounts: The document outlines various types of discounts traders may offer, including cash discounts for immediate payment, trade discounts for specific customer groups, and customer discounts categorized into several types such as agreements, business protection deals, and price promotions.
- VAT Treatment: For cash and trade discounts, VAT is calculated based on the actual amount paid, in accordance with section 19(2) of the VATA 1994. Other discounts, such as customer agreements and promotions, are generally taxable, and specific VAT implications apply based on the nature of the discount provided.
- Guidance for Record Adjustments: Adjusting records for these discounts is detailed in the V1-24A guidance on Trader Records, available online, emphasizing the importance of accurate bookkeeping in line with VAT regulations related to discounts.
Source gov.uk
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