Who pays VAT on boxes sold to
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leasing companies? Not us, says York Trailer
• The York Trailer Company has told the Government that it will not be paying VAT on ISO containers which it has been selling to American leasing companies. In a letter this week to Mr T. P. G. Kitson. MP for Northallerton York's chairman, Mr F. W. Davies, said that if HM Customs and Excise persisted in their demand for VAT upon ISO boxes then the company would consider seriously terminating their construction.
York takes the view that if the containers are sold to American companies and paid for in dollars then they are exports and as such are zero rated. Because the boxes are sold to leasing companies and then leased to carry exports to America the customs authorities state that they are liable for VAT.
A spokesman for York explained this week that if the containers were shipped out empty on the first trip tax would not be payable. "This is a ridiculous and intolerable situation,he said. "and we shall certainly not be paying tax until agreement has been reached."
The leasing companies point out that they do not have to buy containers in the UK: they could buy them anywhere and load them in the UK.
The attitude of the Customs to this is apparently that US leasing companies are acting like "international strongarm" men inferring they are above the law.
And the container manufacturers in the UK maintain that European and Japanese container workers do not charge taxes to overseas buyers. Therefore VAT puts UK manufacturers at a 10 per cent disadvantage. "This mess." they say. -will cost Britain am in foreign exchange, approximately 1500 jobs and a hardwon slice of a major world market."
The SMMT has asked the Department of Trade and Industry to investigate whether Continental container makers do in fact pay VAT in eauivalent circumstances, and are awaiting a reply.