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HMRC internal manual

VAT Supply and Consideration

Whether supplies are goods or services: Transfer of possession followed by title

Title may transfer after an earlier transfer of possession. This can be one or two supplies: a single supply of goods at the outset, for example hire purchase, or a supply of services (hire) and a later separate supply of goods.

A number of different terms are used where there is a supply of goods at the outset: hire purchase, lease purchase, contract purchase. There is a similar range of terms for a supply of services: hire, lease, contract hire.