Font Size

HM Revenue and Customs Brief 67/07


HM Revenue and Customs -Tax Authorities

Tax Articles
Submit Articles   Back to Articles

Issued 9 November 2007

VAT: Rebates and credit notes relating to customer discounts and associated payments

This Revenue & Customs Brief article explains the VAT treatment of rebates, credit notes and similar transactions relating to business promotions between suppliers and their customers.


Revenue & Customs Brief 08/07 explains the VAT treatment of manufacturers’ cash back payments. That brief covers payments that occur outside the direct supply chain. This brief explains the correct VAT treatment for supplier discounts, volume rebates and charges made by the customer when promoting the suppliers’ products.

The attached table outlines the differing forms that these transactions take and their VAT treatment.

With effect from 1 January 2008, you are required to apply the correct VAT treatment as outlined. We do not wish to create any unnecessary business cash flow problems where there is little or no revenue at risk. Therefore, no retrospective action will be taken on transactions occurring before that date.

Customer discounts – a glossary of terms (PDF 32K) -

About the Author

© Crown Copyright 2007.

A licence is need to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs under the terms of a Click-Use Licence. Tax briefs are updated regularly and may be out of date at time of reading.

Follow us @Scopulus_News

Article Published/Sorted/Amended on Scopulus 2007-11-13 21:23:30 in Tax Articles

All Articles

Copyright © 2004-2021 Scopulus Limited. All rights reserved.