- The First-tier Tribunal allowed VAT recovery on two Land Rover Discovery vehicles after conversion into cars.
- Three Shires Trailers Limited purchased the vehicles as commercial for business use.
- Modifications included adding fold-up seats and clearing blacked-out windows.
- HMRC initially disallowed VAT recovery but later accepted the initial recovery.
- HMRC attempted to charge output VAT on the conversion as self-supply.
- The Tribunal ruled the vehicles were commercial at purchase, allowing VAT recovery.
- After modification, vehicles became motor cars but qualified as qualifying motor cars.
- No self-supply charge was applicable.
- Key principles: modifications can convert vehicles to cars, qualifying motor cars status prevents self-supply charges, and business-only usage is crucial for VAT recovery.
- The decision provides guidance for businesses on VAT recovery for vehicle modifications.
Source: deeksvat.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
