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VW Financial Services (UK) Ltd (VWFS) v HMRC


The Court of appeal has issued its judgement on the above case and has upheld the tax payer’s appeal and allowed the general overheads incurred by the tax payer to be treated as directly attributable to the taxable supply of the cars rather than partly linked to the exempt supply component of finance.

In addition the tax payer argued that it was entitled to recover 50% of the residual input tax on the basis that for each transaction there were two supplies. This was also allowed.