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Sam, Accountant
Category: Tax
Satisfied Customers: 14166
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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We are establishing a company that packages several baby care

Customer Question

We are establishing a company that packages several baby care products and sells them as 1 combined unit. How do we handle the VAT on this as the constituent elements must have different VAT rates if they were sold individually?
Submitted: 4 years ago.
Category: Tax
Expert:  Sam replied 4 years ago.

Hi Just Answer Customer


Thanks for your question


You need to establish the VAT due on each element of the made up package - and apply a mixed rate on the total package

I have added a link here from the HMRC website that covers all elements of discounts, special offers etc which details how to calculate this mixed rate in Notice 700 item at 31.2.1

Which details examples of when you have VAT exclusive and vat inclusive figures to work with.










Customer: replied 4 years ago.

Hi Sam


Thanks for this - the link takes me to the general contents page and I cannot find the specific example that you have suggested may be relevant. How is the blended rate calculated a total of the VAT per constituent part divided by the total cost of the unit? and is that rate then the rate that is applied to sales price? Or given that it is primarily a nappy, does that make it exempt?



Expert:  Sam replied 4 years ago.

Hi Carla


You need to scroll down to section 31, and click on that (titled Examples of methods for apportioning output tax)

Then from there onwards (within that section) it gives you all the examples you need.


I tried to copy and paste the relevant part but I am afraid that its too large - so you will need to read through the examples given.