Commissioners of Customs and Excise v Hartwell Plc: CA 12 Feb 2003

The taxpayers were motor traders. On agreeing a sale package with a customer, they issued to the customer a voucher worth more than the agreed trade-in value, to be used as credit against the purchase from the taxpayer. They also gave customers MOT vouchers. At first instance, the judge held that neither voucher increased VAT liability, which was to be assessed only on the money paid by the customer plus the agreed trade-in value. The commissioners appealed.
Held: The appeal was allowed in part. Though the monetary equivalent attributable to the agreed part exchange was the value to be attributed towards the replacement, the ‘purchase-plus’ vouchers provided an over-allowance for the trade-in vehicle and, to calculate the VAT chargeable, had no monetary value and did not increase the consideration paid to the taxpayers for their supply. The MOT vouchers were not granted to a customer for a consideration to which the Act applied and the consideration on which VAT was payable was increased by the value of the vouchers.

Judges:

Ward Chadwick Arden LJJ

Citations:

[2003] EWCA Civ 130, Gazette 03-Apr-2003, Times 17-Jun-2003, [2003] STC 396

Links:

Bailii

Statutes:

Value Added Tax Act 1994 19 Grp6

Jurisdiction:

England and Wales

Citing:

Appeal fromCommissioners of Customs and Excise v Hartwell Plc QBD 2002
Motor traders gave customers a voucher to be set off against the cost of a replacement car and other services.
Held: Patten J said: ‘The Purchase Plus allowance is negotiated and agreed as a reduction by Hartwell in the amount which the . .

Cited by:

CitedLex Services plc v Her Majestys Commissioners of Customs and Excise HL 4-Dec-2003
When taking a car in part exchange, the company would initially offer the correct market value. If the customer wanted, the company would agree a higher price. When cars were returned, the company at first reclaimed the VAT on the re-purchase price, . .
Lists of cited by and citing cases may be incomplete.

VAT

Updated: 07 June 2022; Ref: scu.180717