Vanrooyen (Elite Prestige Supercars) Limited v The Commissioners for HMRC
[2023] UKFTT 338 (TC)
Three Shires Trailers Limited v The Commissioners for HMRC
17 January 2024
[2024] UKFTT 79 (TC)
First-tier Tribunal
A company converted vans into passenger vehicles for work. The tax authorities said they owed extra tax because they hadn't paid tax on the converted 'cars'. The court decided the vehicles were still for business use only, and so no extra tax was owed.
Key Facts
- •Three Shires Trailers Ltd. (Appellant) converted two Land Rover Discoveries from commercial vehicles to carry more passengers for business use.
- •HMRC assessed additional output tax (£22,497.66) due to alleged self-supply of non-qualifying cars under Article 5 of the Value Added Tax (Cars) Order 1992.
- •Appellant argued the vehicles were qualifying cars or that any conversion was temporary.
- •Appellant later reversed the modifications.
- •HMRC rejected the Appellant's error correction notice.
Legal Principles
Self-supply of motor cars under Article 5 of the Value Added Tax (Cars) Order 1992.
Value Added Tax (Cars) Order 1992
Definition of 'motor car' under Article 2(1) of the Order.
Value Added Tax (Cars) Order 1992, Article 2(1)
Input tax credit under Section 25 of the Value Added Tax Act 1994.
Value Added Tax Act 1994, Section 25
Input tax disallowance for non-qualifying motor cars under Article 7 of the Value Added Tax (Input Tax) Order 1992.
Value Added Tax (Input Tax) Order 1992, Article 7
Conditions for a 'qualifying motor car' under Article 7(2A) of the Value Added Tax (Input Tax) Order 1992.
Value Added Tax (Input Tax) Order 1992, Article 7(2A)
Outcomes
Appeal allowed.
The Tribunal found the vehicles were converted to qualifying cars; therefore, no output tax was due on the conversion because the input tax block did not apply.
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