News-tc-Ford Motor Company

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The taxpayer company sold motor cars through dealers or a company in its group. One of the company's promotions offered customers the free provision of car insurance when they bought a car. The company paid premiums for these services. In addition customers were offered breakdown cover when they bought a car. The cost of this was included in the final invoice; the customer did not pay for it separately.
The taxpayer claimed that it should only have to account for VAT on part of the price of the cars sold with insurance or breakdown cover as a portion of the price referred to a separate supply of insurance or insurance-related services. The VAT tribunal dismissed the claim saying that no part of the price of the car constituted consideration for the supply of insurance related services. Thus there was no VAT supply. However after...