In Mercedes-Benz v HMRC (FTC/13/2013 – 2 May 2014) the UT held that a motor vehicle finance agreement called ‘Agility’ was a supply of services (and not a supply of goods as contended by HMRC).
Agility was the product recommended to customers who wished to have the immediate use of a car in exchange for monthly payments but who were not sure they wished to purchase the car at the end of the arrangement. An Agility agreement therefore shared similarities with both a leasing agreement and a hire-purchase agreement.
Whether Agility contracts were supplies of services or supplies of goods determined the way VAT was chargeable on those contracts. If Agility contracts were not supplies of goods Mercedes-Benz would have to account for VAT on the consideration payable each month. If Agility contracts were supplies of goods Mercedes-Benz would be liable for the entire...
90a1d87b-c1b5-43c3-a720-cd324830adee.tmb-editorspic.jpg?sfvrsn=1b2d0a7e_1)
