Quote:
Originally Posted by Jellby
But they are different products. I sell CDs and offer a separate free service.
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But the free separate service is one that is only available to the people who buy the CDs. I can't see how you can avoid the conclusion that the free service is sold as a package with the CD. Mike L is right - this wheeze has come up before, back when books first started to have CDs bound into them. The CD had to have standard rate VAT and the book zero rate, and even though the CD was 'free' with the book, HMRC (or HMC&E as they were then) insisted that VAT would have to be charged on the value of the 'free' CD.
This was, of course, this was before books on CD were allowed to be zero rated.
No - a good idea, but Mike L's right, HMRC are there before you - I'd just forgotten.