HMRC loses Tyne appeal on zero-rated vehicle adaptations

A business which faced paying disputed VAT of over £700,000 on sales of motor homes adapted for use by disabled people has won a First Tier Tribunal (FTT) appeal against HMRC’s decision to deny zero-rating on the grounds that the particular adaptation did not help a disabled person to drive

Elaine Armstrong and Jonathan Bell, who were partners in Tyne Valley Motorhomes, challenged HMRC’s assessment that they owed £703,583 in VAT relating to the alleged incorrect zero rating of sales of mobile homes which they had sold as zero-rated under Group 12 of Schedule 8 to the VAT Act 1994 relating to aids for the handicapped.

The assessment covered the period March 2007 to September 2010. In addition, the pair also appealed against a £47, 632 penalty levied by HMRC for allegedly submitting VAT returns which were carelessly inaccurate between March 2009 and September 2010. [Tyne Valley Motorhomes vs The Commissioners for Her Majesty’s Revenue and Customs, Appeal number: TC/2011/02488 & TC/2011/07734]

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