Reasonable approach

Value of self-supply made by a car manufacturer

Between 1987 and 1996 the taxpayer accounted for VAT on the basis that when it used one of its own cars that it had manufactured or imported it had made a deemed self-supply. VAT was chargeable on two-thirds of the retail list price of each vehicle. It later submitted a repayment claim on the basis that it should have accounted for VAT on a lower amount.

HMRC rejected the claim.

The First-tier Tribunal allowed the taxpayer’s appeal. HMRC appealed to the Upper Tribunal.

The first issue for the tribunal was whether the taxpayer could rely on the price of imported vehicles as an alternative measure of the price of UK-manufactured cars from 1992. HMRC said that a car imported from a sister company could not be regarded as identical to the same model manufactured in the UK. The judge disagreed...