United Kingdom Tax Tribunal Clarifies Rules on Input VAT Deductions, Zero-Rating for Second-Hand Car Transactions

The United Kingdom First-Tier Tax Tribunal Jan. 9 issued a judgment in Case No. TC09752, clarifying the rules on input VAT deductions and zero-rating for second-hand car transactions. The taxpayer, a company primarily engaged in manufacturing and repairing tanker equipment, purchased high-value used cars in Northern Ireland and sold them to purported customers in the Republic of Ireland. The taxpayer claimed entitlement to an input VAT deduction on the purchases and zero-rating on the onward supplies. The Tax Agency denied the taxpayer’s claims. On appeal, the Tax Tribunal found that the taxpayer: 1) knew or should have known, through its ...