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Law: VAT Officers seeking to set new rules on VAT recovery

HMRC in charge of VAT recovery have sought to force motor dealer groups to consider profit comparisons rather than income comparisons between VAT-able and VAT-exempt sales.

Higher margin products such as finance and insurance products attract higher profits and therefore a move to a profit based calculation will lead to a huge charge by HMRC when recovering VAT.

The challenge was made by Camden Motors but it is possible that HMRC may appeal the decision.

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