Second-hand margin scheme and repossessed vehicles
In Volkswagen Financial Services (UK) Ltd v HMRC [2020] UKUT 42 (TCC) (27 February 2020) the Upper Tribunal found that the second-hand margin scheme could not apply to the resale of vehicles following repossession under finance agreements terminated early.
VWFS bought vehicles from a dealer and supplies those vehicles to customers under finance agreements. Sometimes the finance agreements were terminated early and the vehicles were repossessed. Once the vehicles had been repossessed they are then resold.
The VAT treatment of the resales was the subject of dispute in the Upper Tribunal. VWFS believed that the resales should be treated under the second had margin scheme. HMRC had already successfully argued in the FTT that they should not with the consequence that VAT should be accounted for on the full resale price.
The appeal hinged upon whether there was a supply of goods by...
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Second-hand margin scheme and repossessed vehicles
In Volkswagen Financial Services (UK) Ltd v HMRC [2020] UKUT 42 (TCC) (27 February 2020) the Upper Tribunal found that the second-hand margin scheme could not apply to the resale of vehicles following repossession under finance agreements terminated early.
VWFS bought vehicles from a dealer and supplies those vehicles to customers under finance agreements. Sometimes the finance agreements were terminated early and the vehicles were repossessed. Once the vehicles had been repossessed they are then resold.
The VAT treatment of the resales was the subject of dispute in the Upper Tribunal. VWFS believed that the resales should be treated under the second had margin scheme. HMRC had already successfully argued in the FTT that they should not with the consequence that VAT should be accounted for on the full resale price.
The appeal hinged upon whether there was a supply of goods by...
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