For many years suppliers could account for VAT on the discounted price offered for prompt payment, even if the prompt payment discount (PPD) was declined. Following a change in the law, VAT must be accounted for on the consideration actually received.
Generally, VATA 1994, Sch. 6, para. 4 (as amended by FA 2014, s. 108) is aligned with Directive 2006/112, art. 79 from 1 April 2015 to ensure VAT is charged on the full consideration paid for goods and services where PPDs are offered. The change may apply before that date for supplies specified in a statutory instrument.