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V3.151 Value of supplies—overview

The amount of VAT chargeable on a taxable supply¹ made by taxable persons² in the UK³ in the course or furtherance of a business carried on by them⁴ is determined by reference to the value of the supply⁵.

In broad terms, the value of a supply is determined by reference to the consideration for the supply⁶. The consideration is a tax inclusive amount⁷.

For supplies valued on special bases, see V3.166.

Since the consideration for a supply represents a tax-inclusive amount, it follows that the tax-inclusive amount comprises two elements:

1. Ìý

   •ÌýÌýÌýÌý the value of the goods or services supplied, and

2. Ìý

   •ÌýÌýÌýÌý the tax (if any) chargeable on the supply

In Hostgilt⁸, where a contract for the sale of land indicated that the stated purchase price was exclusive of VAT, VAT was held to be payable in addition to that price. Had the contract been silent in connection with VAT, the price would have