Claims for interest on overpaid VAT on Demonstrator cars restricted

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Overpayments arose when demonstrator vehicles were sold under the 'margin scheme'

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A recent ruling by the Upper Tribunal (a special higher tribunal in VAT cases) has restricted claims by dealers for interest lost in treating demonstrators as ‘non qualifying vehicles’ to simple interest as opposed to compound interest. 

The VAT overpayments arose when demonstrator vehicles were sold under the ‘margin scheme’.

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