A retailer may wish to make a multiple supply, being:

(1)a standard-rated supply of goods; and

(2)an exempt supply of insurance services relating to those goods

with the allocation of the total charge to the customer being biased significantly to the exempt supply.

Example: Interaction of VAT and insurance

A retailer sells a waterbed for £2,000, together with an insurance policy which covers the customer in the event of subsequent defects in the water heater or water bag which the retailer fails to correct within a specified period (e.g. because the retailer is insolvent).

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