Ireland Generator and Spare Parts Ltd v Revenue and Customs (VAT - CARS : Other)

VAT � entitlement to credit for input tax on motorcar � Article 7 of VAT (Input Tax) Order 1992 (SI 1992/3222) considered � whether intention to make car available for private use � physical or legal restraint as to private use � no � appeal dismissed

This was an appeal in respect of a disputed decision dated 15 February 2016 whereby HMRC disallowed input tax in relation to the purchase of a motor vehicle (an electric car) (�the car�) in the VAT period 10/15 in the amount of� �2.424.16.� That decision was predicated on the basis that the car was available for private use.

I explained to Dr Laverty the limitations of the Tribunal�s jurisdiction and, in particular, that the Tribunal would not be considering HMRC�s conduct of the enquiry prior to the disputed decision being issued.

Special rules apply to the treatment of input tax on the supplies of cars.� The rules are contained in Article 7 of VAT (Input Tax) Order 1992 SI 1992/3222 (�the Input Tax Order�).� The general rule is that VAT charged on a supply of a car to a taxable person is excluded from credit under Section 25 Value Added Tax Act 1994 (�VATA�).� There are, however, a number of exceptions to the general rule in Article 7.� Paragraph 2(a) of Article 7 provides that the VAT is not excluded from credit where the car is

For the purposes of this appeal, it suffices to say that this was a qualifying motor car and that the appellant was and is a taxable person.