VAT

The taxpayer entered into a particular type of motor vehicle finance agreement, which might lead to customers acquiring a vehicle. The Revenue and Customs Commissioners (the Revenue) issued assessments to VAT on the basis that the agreement constituted a supply of goods and the First-tier Tribunal (Tax) (the FTT) dismissed the taxpayer’s appeal. The taxpayer appealed. The Upper Tribunal (Tax and Chancery Chamber), in allowing the appeal, held that the FTT had made an error of law in its interpretation of Art 14(2)(b) of Council Directive (EC) 2006/112. Further, the agreement could not be characterised as a contract for the sale of a vehicle.