(scotland) Limited
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HMRC is stepping up its challenge to input tax recovery on repair services under warranty, or similar policies. 

Following the Supreme Court’s judgement in the WHA Ltd (WHA) case, HMRC is challenging input tax recovery on repair services provided under Mechanical Breakdown Insurance (MBI) cover.

The Supreme Court concluded that the supply of repair services by the garage was to the insured party and not WHA, the claims handling company in this instance. Consequently, the input tax was irrecoverable for WHA.

The judgement provides HMRC with case law precedent that it is seeking to apply in other similar contractual situations.

Who is potentially affected

Businesses receiving services under warranty, including car dealers, retailers and wholesalers. Businesses providing extended warranties and benefit-in-kind insurance (i.e. where the customer has the option of a cash indemnity for the repairs required).

How can VAT Services (Scotland) Ltd help you

  • Review the current supply chain and contractual position and determine the likelihood of challenge from HMRC; and
  • Provide analysis on the VAT position and obtain clearance from HMRC (where applicable).

Contact us

Should you wish further information on the above, please do not hesitate to contact Gary using the details outlined below.


Gary Moore
Direct line 0141 636 9353
Mobile 07812 061 582
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