CHERRY-PICKING VAT TREATMENT

摘要

The Court of Justice of the EU (CJEU) has issued a decision in GMAC (C-589/12) which, while not surprising, is a setback for HMRC. The dispute related to VAT rules applicable under now-obsolete VAT legislation concerning repossessed hire purchase (HP) cars. The former rules did not allow the supplier to apply bad debt relief or otherwise reduce the value of the consideration where a customer defaulted on the HP instalments. This was wrong under EU law. But where a repossessed car was sold, the supply was exempt. This was wrong under EU law.