Credits to customers’ energy accounts for referrals

Bulb Energy Ltd (Bulb) is a member of a VAT group of which Simple Energy Ltd is the representative member. In 2016 Bulb introduced the ‘refer a friend’ scheme (RAF) under which existing customers could click on a referral link to encourage family and friends to change their electricity and gas supplies to Bulb. The reward for a successful new account – which was triggered by the first supply of energy to the new customer – was a £50 reduction in the bill of the new customer and the same amount for that of the referrer. If the new customer switched only either their gas or electricity account – rather than both – the reduction was £25.

The First-tier Tribunal had to decide whether the £50 reduction was a discount on the energy bills of the refer or represented non-monetary consideration by them towards the payment of...