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Pendragon plc & others v CRC, Supreme Court
The taxpayers were car dealers who set up a scheme to facilitate the sale of demonstrator vehicles. The group accounted for VAT on the profit margin on the sale rather than the full price.
HMRC said the scheme was artificial contrary to the principle in Halifax v CCE [2006] STC 919 and was designed to provide a tax advantage. The department said VAT was chargeable on the full value of the car.
The taxpayers appealed.
The First-tier Tribunal allowed the appeal but the Upper Tribunal overturned the decision ruling that the main aim of the scheme was to obtain an illegitimate tax advantage.
The Court of Appeal restored the FTT’s ruling saying it...
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