VATSC82800 - Single and multiple supplies: Single supply indicators
Normally, it will be clear when a single supply is being made where the supply is that of one item. A book, for example, may have various components that have contributed to its final stage - supplies of paper, printing and binding - but what is being supplied at the final stage is the finished product which is a single item.
Where the supply appears to consist of more than one component, the supply is still a single supply if there is clearly one overall supply being made to which the remaining components can be seen as incidental, integral or ancillary. This means that whilst the components may be either minor or significant in their own right and may be capable of being supplied separately, they are an integral part of the main supply.
There may be instances where a customer has asked for the various elements of a supply to be listed individually on an invoice, usually from a wish to see a cost breakdown. This does not in itself necessarily indicate a multiple supply - the whole situation should be taken into account using the indicators below.
Various court cases (notably British Airways - see VATSC84600) have decided that the test to determine whether a component is part of a single supply, or is itself a separate supply, is whether the component is an integral part of what is being supplied. This includes anything which is essential, necessary or incidental, but goes further to include non-essential elements which are integral to the actual supply being made.
An incidental element of a supply is one which naturally accompanies the main supply and generally is not a significant part of it. Examples of incidental elements are the instruction booklet provided with new electronic equipment, packaging materials or the services of packing and transport. An incidental element is, nonetheless, an integral part of the overall single supply.
The following list of indicators is not exhaustive or conclusive proof of a single supply, but the more of the features that a transaction has, the more likely it is that a single supply is being made where there is more than one element to the package:
- There is a single price or the customer pays the same amount, no matter how much of the package they actually receive or use.
- The elements are advertised as a package.
- The different components are not available separately.
- Goods are physically packaged together (e.g. a plastic toy enclosed in a packet of cereal).
- It would not normally make sense to supply part of the package independently (e.g. a new fridge and its delivery from the warehouse).
- Although components are separately priced, the values assigned seem to arbitrarily stripped out of the package price.
- The customer perceives what they receive as a single supply, not independent elements (eg one supply of a tailor-made suit, not separate supplies of cloth and tailoring services).
- The different components are aspects of the quality or grade of the overall supply.
- The different elements are integral to one overall supply - if one or more is removed, the nature of the supply would be affected.
- Some components are clearly incidental or ancillary to an identifiable main supply - for customers these are a means of better enjoying the main supply.
- The separation of elements, on an invoice or otherwise, is artificial.