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HMRC internal manual

VAT Registration

Special considerations for certain registrations: finance houses

When a finance house provides funds to finance the purchase of goods on hire purchase or conditional sale - for example, a car purchased from a retailer or dealer - the finance house usually becomes the owner of the goods.

There is therefore:

  • a supply of goods by the retailer or dealer to the finance house, and
  • an onward supply of the goods from the finance house to the customer, usually at the same price.

In such circumstances, the finance house is making taxable supplies, in addition to its exempt supplies of finance, so is liable to be registered.