Tesco Plc v Customs and Excise Commissioners: CA 14 Oct 2003

The taxpayer had a loyalty scheme under which they issued vouchers to shoppers who had purchased goods to a certain value. They sought to deduct the sums when accounting for VAT.
Held: Upon earning 150 loyalty points in a quarter, vouchers were given to customers, and there were other schemes. The entire cycle of transactions was to be considered objectively without regard to what the customer thought was being purchased. Para 5 had effect where there was a grant for a consideration of a right to receive goods for an amount stated on a voucher quantifying that right. The paragraph could not apply without a token, but a token did not guarantee its applicability. The issue of a voucher was a separate procedure from the original purchases, and the customer had not purchased the voucher. The paragraph did not apply. The existence of consideration under English law may not suffice to show consideration for the purposes of European VAT law.


Lord Justice Schiemann, Lord Justice Latham And Lord Justice Jonathan Parker


[2003] EWCA Civ 1367, Times 16-Oct-2003, Gazette 06-Nov-2003, [2003] STC 1561




Value Added Tax Act 1994 S-6 P-5


England and Wales


Appeal fromTesco plc v Commissioners of Customs and Excise ChD 2002
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Cited by:

CitedRevenue and Customs v Debenhams Retail Plc CA 18-Jul-2005
The store introduced a system whereby when a customer paid by credit card, the charges made to them for card handling were expressed as a separate amount on the receipt. The store then said that VAT was payable only on the net amount allocated to . .
CitedPendragon Plc and Others v HM Revenue and Customs CA 23-Jul-2013
The Revenue had imposed a penalty on the appellants saying that their arrangement for the sale and VAT taxation of demonstrator cars was, in European law terms. The taxpayer sought re-instatment of the First Tier Tribunal judgment in its favour.
Lists of cited by and citing cases may be incomplete.


Updated: 08 June 2022; Ref: scu.186822