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 attributable to HP transactions, and whether any of the residual input tax paid by VWFS in respect of such general overheads (so far as apportioned to the retail sector) is deductible against the output tax paid on the taxable supply of vehicles to customers.
Held: A reference was necessary to refer the matter to the European Court of Justice.
Judges:
Lord Neuberger, President, Lord Kerr, Lord Reed, Lord Carnwath, Lord Gill
Citations:
[2017] UKSC 26, [2017] STI 1039, [2017] STC 824, [2017] BVC 15, UKSC 2015/0224
Links:
Bailii, Bailii Summary, SC, SC Summary, SC Summary Video
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 – . .
At UTTC – 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 . .
Appeal from – Volkswagen Financial Services (UK) Ltd v HM Revenue and Customs CA 28-Jul-2015
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 . .
Cited – Pegasus Birds Ltd v Commissioners of HM Customs and Excise CA 27-Jul-2004
The taxpayer complained that the assessment imposed by the Commissioners was wholly unreasonable, and void. The tribunal had found the assessment wholly unreasonable, but the High Court had allowed the Commissioners’ appeal.
Held: There was no . .
Cited – Banbury Visionplus Ltd v HM Revenue and Customs ChD 9-May-2006
Appeal against termination of special exemption method.
Held: The taxpayer’s appeal was dismissed. The VAT tribunal’s jurisdiction was unlimited. No limitation was implied by the wording of the section. The tribunal’s discretion had only to be . .
Lists of cited by and citing cases may be incomplete.
VAT, European
Updated: 25 July 2022; Ref: scu.581353