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HMRC internal manual

VAT Personal exports - tax-free sales of new motor vehicles for use before export

Procedures for supplying vehicles under the scheme: hire purchase

It is unusual for entitled persons, other than members of HM Forces, to buy vehicles under a hire purchase agreement which vests ownership of the vehicle in a finance company. Provided that the application for the supply is made by the entitled person, and the applicant’s name is that shown as keeper by the dealer in the registration book, this does not prevent a supply under the scheme. However, when a vehicle is being purchased on hire purchase, the dealer is making a taxable supply to the hire purchase company and must charge output tax on the supply. The VAT 410 application must show the hire purchase company as the supplier and the dealer must send copy 3 of the VAT 410 to the hire purchase company to support the zero-rating of their supply to the entitled person.