RevenueValue added tax - supply of goods or services - agent earning either commission of 10% in cash or discount of 12.5% on goods ordered - VAT not payable on discount on goods orderedCommissioners of Customs and Excise v Littlewoods Organisation Plc: CA (Lords Justice Aldous, Chadwick and Sedley): 26 October 2001The mail order company carried on its business through a network of agents who were paid either commission of 10% in cash or given a discount of 12.5% on goods ordered.

An issue arose as to whether the 12.5% discount on goods attracted VAT.

A VAT tribunal held that it did not, but Mr Justice Lightman held that it did.

The company appealed.David Milne QC and Penelope Hamilton (instructed by Landwell) for the company.

Nigel Pleming QC (instructed by Solicitor, Customs and Excise) for Customs and Excise.Held, allowing the appeal, that there was no direct link between the agent's right to take commission in goods at the rate of 12.5% and any service which the agent had, or had not, provided in relation to a third-party sale; that there was therefore no basis for treating the provision of services as a non-monetary element for the supply of secondary goods; and that, accordingly, the commission in goods was a price discount or rebate allowed to the agent at the time of supply of secondary goods, and was not to be included in the taxable amount.