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05 October 2010 / Mike Thexton
Issue: 4275 / Categories: Comment & Analysis , VAT
Assets used partly for business and partly for private purposes can cause VAT problems. MIKE THEXTON explains Lennartz accounting


  • The principle of the Lennartz case.
  • HMRC’s resistance to the Lennartz approach.
  • The ECJ overrules VATA 1994 Sch 4 para 5(4A).
  • The decision in VNLTO restricts the principle.
  • The current state of play with Lennartz.

Lennartz accounting is one of those subjects that only a VAT geek could be interested in; so let me try to get your attention. If you were given the choice between paying £100 000 in tax now and paying the same amount in interest-free instalments over say 20 years with the possibility that you might be able to stop paying part way through which would you pick?

In the right circumstances the European Court of Justice insisted that the taxpayer should have that choice. HMRC fought a losing battle over nearly 20 years...

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