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HMRC internal manual

VAT Valuation Manual

Specific applications: apportionment and valuation of membership benefits: non-monetary consideration provided for membership benefits - general

Where non-monetary consideration occurs in the form of making a loan or buying a security, the amount loaned or given for the security is not necessarily relevant in determining the value of the membership supplies made, and cannot be taken as the value of those supplies. For example, if a club were to require all members to make a loan of £100 to remain in enjoyment of the membership facilities, no part of the £100 itself represents consideration for those supplies. The consideration is not the £100 lent but the lending of the £100. When the value of this is determined under S.19(3) of the VATA 1994, the valuation principles applied operate irrespective of the amount lent. The following paragraphs deal with various forms of non-monetary consideration, and demonstrate how the valuation principles apply.