V16.892 Claims made in the light of GMAC High Court decision—treatment of returned cars and other goods
Information Sheet 5/04, 6 May 2004
This Information Sheet explains how Customs will deal with claims made based upon the decision in the GMAC High Court case.
1.1 What is this Information Sheet about?
The High Court has upheld the decision of the Tribunal which found against Customs & Excise in the case of General Motors Acceptance Corporation UK Ltd (GMAC) case (LON/01/242). Customs have accepted the ruling of the High Court. This Information Sheet updates VAT Information Sheet 06/03 and outlines the basis on which Customs are now prepared to accept claims for reimbursement of tax that has been incorrectly paid to them.
GMAC sell cars to members of the public on deferred payment terms. These deferred terms include hire-purchase (HP) agreements. Ownership of the cars covered by these HP agreements only transfers to the customer when all the required payments have been made. Providing they had made all other required payments up to that point, GMAC customers had the option of not having to make the final payment (the “balloon” payment). Instead they could return the car to GMAC, and, providing it was in acceptable condition, the customer was no longer liable for that balloon payment. GMAC could require the customer to pay the cost of repairs if the car was not in acceptable condition.
In addition to the option set out above GMAC's HP customers had entitlement, as a result of the Consumer