The parties disputed the recoverability of VAT on the general expenses of the appellant which operated a car financing company. In particular: ‘whether any of the residual input tax paid by VWFS in respect of the general overheads of the business is deductible against the output tax paid on the taxable supply of vehicles to customers. In short, HMRC contend that the correct tax treatment of the residual input tax on overheads in this case is that the overheads are all attributable to the exempt supplies of finance and the input tax is therefore irrecoverable.’
Held: The input tax was recoverable.
Patten LJ explained: ‘The First-tier Tribunal proceeded on the basis that the only dispute about methodology was whether any part of the residual input tax was attributable to and could be set-off against the taxable supplies of vehicles made in the retail sector of VWFS’s business. But HMRC contend that they did challenge the apportionment formula contained in the proposed PESM on wider grounds and that a lower figure than 50% should be attributed to the taxable supplies of vehicles as part of the hire purchase contracts in terms of the use made of the allocated inputs.’
Judges:
Patten, Sharp, King LJJ
Citations:
[2015] EWCA Civ 832, [2015] STI 2533, [2016] STC 417, [2015] BVC 32
Links:
Jurisdiction:
England and Wales
Citing:
At FTTTx – Volkswagen Financial Services (UK) Ltd v Revenue and Customs FTTTx 18-Aug-2011
VAT – partial exemption special method – hire purchase transactions – taxable supplies of goods and exempt supplies of credit – whether a methodology attributing part of residual input tax to taxable supplies of goods is fair and reasonable – . .
Appeal from – HM Revenue and Customs v Volkswagen Financial Services (UK) Ltd UTTC 12-Nov-2012
UTTC VAT – partial exemption special method – hire purchase transactions – taxable supplies of motor vehicles and exempt supplies of credit – whether residual cost inputs have a direct and immediate link with and . .
Cited by:
Appeal from – Volkswagen Financial Services (UK) Ltd v Revenue and Customs SC 5-Apr-2017
The court considered the VAT treatment general business overheads of a vehicle financing company, and in particular the ‘partial exemption special method’ (‘PESM’) agreed with HMRC for the valuation of the proportion of residual input tax . .
Lists of cited by and citing cases may be incomplete.
VAT, European
Updated: 25 July 2022; Ref: scu.550647
