Fleet News

Lords veto BT's delivery charge VAT claim

FLEETS that deal directly with manufacturers will have to collect cars or arrange for their delivery themselves if they are to stand any chance of recovering VAT on delivery charges. But if manufacturers arrange the delivery, fleets will not be able to reclaim VAT, the House of Lords has ruled in the long-running case between Customs & Excise and British Telecommunications.

BT had argued the supply of a car and its delivery were separate, and therefore that it could recover VAT on the delivery element of the invoice.

It won its case at a VAT tribunal in 1996, only for Customs to appeal and win in the High Court in March 1997. The case then went to the Court of Appeal where BT won last year, only for the verdict to be overturned by the House of Lords, which has settled the matter once and for all.

Lord Slynn of Hadley ruled that although manufacturers used third party suppliers to deliver the cars: 'If the transaction is looked at as a matter of commercial reality there was one contract for a delivered car: it is artificial to split the various parts of the transaction into different supplies for VAT purposes.'

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