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HMRC v GMAC UK plc (formerly General Motors Acceptance Corporation (UK) plc)

Old bad debt relief rules: sale of repossessed cars

In HMRC v GMAC UK plc (formerly General Motors Acceptance Corporation (UK) plc) (Upper Tribunal – 6 August) a company (G) claimed bad debt relief of more than £2 000 000 covering the period from 1978 to 1997 in relation to hire purchase contracts for motor vehicles terminated early on default without full payment and without the buyer becoming owner. HMRC rejected the claim on the basis that the effect of VATA 1994 s 36(4)(b) as originally enacted and prior to its amendment by FA 1997 was that no relief was due. G appealed contending that the relevant conditions contravened EC law and should be treated as invalid and ineffective. The First-tier Tribunal accepted this contention and allowed the appeal. HMRC appealed to the Upper Tribunal contending inter alia that G was not entitled...

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