From: Ronald Raygun 
Subject: Re: Tax point & contract law
Newsgroups: uk.finance uk.business.accountancy
Followup-To: uk.finance
Date: Mon, 01 Nov 2004 01:12:22 GMT

Nogood Boyo wrote:

> I suspect that in fact the HP company received the invoice from the
> truck company in month 1 and delayed the finalisation of the HP
> agreement to month 2.  The haulage contractor is liable to have
> misunderstood this point.

I'd say it's crucial in this case to understand whether "HP" is
being used accurately or euphemistically.  If it really is "hire
purchase" in the old-fashioned traditional sense, then the HP company
is buying the truck and hiring it to the haulier until enough money
has changed hands that the HPco transfers ownership to the haulier.

In such case it doesn't seem right that the haulier should be paying
VAT at all -- since he's not buying anything -- yet.

If, however, "HP" is being used in the lax sense of "loan", then the
loan company never owns the vehicle and does not figure in the VAT
invoicing.