VAT: Supplies of repossessed goods
In Buy As You View Ltd v HMRC (TC00486 – 18 May) a company (B) sold electrical goods such as televisions refrigerators and washing machines under hire-purchase agreements. In cases where customers could not make the necessary payments it repossessed the goods. Where possible it resold the goods (although some items were repossessed in such poor condition that it was impossible to resell them). Initially B accounted for output tax on such supplies. In 2003 it submitted a substantial repayment claim on the basis that it should not have accounted for output tax on the basis that the supplies fell within VAT (Special Provisions) Order SI 1995/1268 Article 4 which stated that there was no supply of goods or services for VAT purposes if goods repossessed under a finance agreement were sold as 'second-hand' goods and...
