HMRC loses £37k VAT case on converted Land Rovers

HMRC chased a company owner for additional output tax for two Land Rover Discovery cars which were bought for commercial use

It was HMRC’s view that the appellant, Three Shires Trailers, had converted the vehicles from commercial use to non-qualifying cars ‘which triggers an irreversible self-supply under Article 5 of the Value Added Tax (Cars) Order 1992’.

On 14 March 2022, HMRC reduced the VAT repayment credit for the appellant’s purchase of the vehicles, with commercial use being the only intention. The additional output tax was £22,497.66, with a total VAT repayment claim of £37,520.85.

Three Shires Trailers appealed to the First Tier Tribunal (FTT) in November 2022, disputing the VAT charge.

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