My client has bought a brand new van from the local main dealer. It has been financed by the main dealer's finance company on a hire purchase.
Client is due a vat refund this quarter and was subjec to a mini compliance check as a result. He was asked to submit lots of invoices for checking with HMRC before they will release the refund, including the van invoice, which he did. They have said everything except the van invoice is ok..
1. VAT inspector initially said the van invoice was not valid because it says "deliver to XYZ Ltd" on it in the customer box. She threatened to charge penalties for an incorrect claim but gave my client 24 hours to get it sorted. Client spoke to main dealer and they have changed the invoice so it just says "XYZ Ltd" in the customer box.
2. Now today, she is saying that this is still not good enough and the main dealer should not have issued the invoice at all, but it should have come from the finance company.
She has not seen a copy of the hp agreement, but it is quite clearly just a bog standard hp agreement. I don't believe the finance company ever becomes the legal owner of the van, they are just financing it, so in accordance with section 8.4.2 of the VAT guide, I think she is talking xxxx.
The manager of the van main dealer has been on the phone to her today but she is adamant that she is correct.
Has anyone experienced this before? Or should we just continue to shoot s 8.4.2 at her?
I don't recall ever seeing a vat invoice issued from the finance company before where a client purchases something on HP. I think they always come from the vehicle supplier. If she is right then there are many many people getting this wrong...