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Our client has been refused a VAT reclaim for a motor vehicle purchased on hire purchase (HP). There is no argument that the VAT on the vehicle should be allowable.
The objection is that the sales invoice from the motor dealer is addressed to the finance company with delivery to our client and not to our client directly.
The invoice provides a breakdown of the purchase including the VAT recoverable but the inspector is asking for a VAT invoice from the HP finance company which it cannot provide as it is exempt.
The documents cross-refer on the description of the vehicle and the amounts to be financed but our claim is being refused because the HP agreement does not show a VAT breakdown on the face of the HP agreement or on a separate invoice presumably required from the finance company as the motor trader...
