Luxurico Ltd v The Commissioners for HMRC

Facts

Luxurico Limited carries on a luxury vehicle hire business under the trading name Platinum Executive Travel. In November 2020 it acquired and imported a hypercar, referred to in the decision as the Index Vehicle, and sought to recover input VAT of £477,508.60 incurred on that acquisition and importation. HMRC refused recovery, relying on the input tax block for motor cars in Article 7 of the Value Added Tax (Input Tax) Order 1992. The appeal as originally brought concerned a number of VAT assessments and issues spanning accounting periods between September 2019 and March 2022, but by the date of the hearing all other matters had been conceded, resolved or were no longer pursued, and it was common ground that the Index Vehicle input tax issue was the sole remaining matter for determination. It was not in dispute that the Index Vehicle was a motor car for the purposes of Article 7, that Luxurico was a taxable person, or that the ordinary conditions for deduction were otherwise met. The dispute was confined to whether, at the time of acquisition and importation, Luxurico objectively intended to use the vehicle primarily for self-drive hire and/or hire with a driver, so as to fall within the exception in Article 7(2E) and (2F) of the Value Added Tax (Input Tax) Order 1992.