HMRC v GMAC

In HMRC v GMAC C-589/12 (3 September 2014) the CJEU found that GMAC could obtain bad debt relief under the Sixth Directive despite the fact that this would represent a windfall.

GMAC was a hire purchase company. It purchased cars from dealers and supplied them under hire-purchase contracts to consumers. GMAC incurred standard rate VAT on the purchase of the cars and charged VAT on its supplies to consumers. When a consumer defaulted GMAC repossessed the car and sold it at auction. Under the VAT (Cars) Order SI 1992/3122 the sale of a car at auction was treated as neither a supply of goods nor a supply of services. The issue was therefore whether the fact that the sale of the cars escaped VAT under domestic legislation precluded GMAC from availing itself...