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VAT: Input Tax Claim on Land Rovers in Three Shires Trailers Case

  • The Three Shires Trailers case involved a dispute over an input tax claim on the purchase of two Land Rover Discoveries.
  • The vehicles were initially commercial vehicles but were converted to cars by adding seats and removing materials from the rear windows.
  • The appellant argued that the vehicles were used only for business purposes and not for private use.
  • HMRC initially disallowed the claim, stating that the vehicles became cars and were subject to an input tax block.
  • The FTT ruled in favor of the appellant, stating that the vehicles were acquired as commercial vehicles and the input tax could be deducted.
  • The judge found that the vehicles were intended and used only for business purposes, making them eligible for input VAT recovery.
  • No output tax was due on a self-supply.
  • This case highlights the difficulty of proving no private use of cars to HMRC.


Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.


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