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Where a supply of any goods or services is not the only matter to which a consideration in money relates, the supply is that part of the consideration, which is properly attributable to it¹. Where the separate elements of a multiple supply² are taxed at different rates, it is necessary to apportion the consideration (where the supplier fixes tax-inclusive prices) or attribute a separate value to each element (in other cases) to calculate the correct tax. There is currently no prescribed method of apportionment but HMRC suggests two practical methods³:

1. Ìý

   •ÌýÌýÌýÌý split the consideration according to the cost of supplying each element⁴, or

2. Ìý

   •ÌýÌýÌýÌý use the market value of each element. This method was used in Jarmain⁵. HMRC states that the market value is the price a customer would normally pay for that supply⁶

HMRC considers that publishing practical guidance on apportionment methods is an effective way of addressing compliance risks. HMRC guidance regarding apportionment is included in the following documents,