Commentary

V6.288 Liability of supplies and activities in the leasing and hire-purchase sector

Part V6 Business by business

V6.288 Liability of supplies and activities in the leasing and hire-purchase sector

Leasing and hire-purchase

V6.288 Liability of supplies and activities in the leasing and hire-purchase sector

Introduction to leasing and hire-purchase

This section considers the liability of supplies and activities of the leasing and hire-purchase sector, including:

  1.  

    •     whether a supply in the sector is one of goods or services

  2.  

    •     the liability of supplies in the sector

  3.  

    •     place of supply considerations of particular relevance to the sector

VAT recovery and other practical points for the sector are covered in V6.289, including (amongst other topics):

  1.  

    •     partial exemption issues

  2.  

    •     the time of supply

  3.  

    •     valuation

The focus of this section and V6.289 is on the lease and hire-purchase of motor vehicles, transport and equipment as opposed to the leasing of land and property.

Goods or services—hire purchase and leasing

Whether a supply is of goods or services is of importance for a number of reasons:

  1.  

    •     it will determine the place of supply (see below)

  2.  

    •     it affects the valuation rules applicable to the supply (see V6.289)

  3.  

    •     it will affect the time of supply (see V6.289)

The nature of a supply in goods is described at V3.112 and the nature of a supply of services is described at V3.113. With respect to the leasing and hire-purchase sector, see especially under 'Transfer of possession under an agreement which expressly contemplates that property in the goods will pass at some future time' at V3.112 and particularly the discussion of the CJEU's judgment in Mercedes-Benz Financial Services UK Ltd [2018] STC 1190 which

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