Hire purchase and leasing

This section outlines the Value-Added Tax (VAT) position regarding hire purchase transactions.

Finance houses involved in hire purchase transactions are accountable persons in respect of the supply of:

  • the underlying goods concerned
  • and
  • the subsequent sale of such goods if repossessed by them.

Further guidance contains more detailed information on the VAT treatment of hire purchase transactions.

Personal Contract Plans (PCPs)

The Court of Justice of the European Union (CJEU) Judgment in the Mercedes Benz case (C-164/16) clarified the position on the VAT treatment of PCPs.  Revenue has  produced guidance on the classification of PCPs from a VAT perspective.

See further guidance for Revenue’s view on the distinction between hire purchase plans and lease agreements in the context of this case.