[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Ford Motor Company Ltd v Revenue & Customs [2007] EWHC 1014 (Ch) (15 March 2007) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2007/1014.html Cite as: [2007] EWHC 1014 (Ch)

[New search] [Help]

IN THE HIGH COURT OF JUSTICE
(CHANCERY DIVISION)

		The Royal Courts of Justice The Strand London WC2A2LL
		15th March 2007

1. SIR DONALD RATTEE: This is an appeal by Ford Motor Company Ltd against a decision relating to its liability to VAT made by the VAT and Duties Tribunal and issued on 31^st August 2006 following a hearing on 19^th and 20^th June 2006.
2. The facts found by the Tribunal are fully set out in paragraphs 10 to 42 of the Tribunal's decision and I shall refer to some of them a little later in this judgment. Suffice it to say at this point that the decision related to Ford's liability to account for VAT on certain sales of its cars between April 1994 and July 2005. The relevant sales were made pursuant to an advertising promotion made by Ford, whereby it offered certain models of car for sale with what was called in its promotional literature "free insurance cover and free breakdown service from the RAC."
3. Although Ford chose to offer the insurance and RAC cover as free to the purchasers of its cars, Ford now argues that they were not free, because it wishes to, and does, argue that part of the price paid by the customer was in respect of the ability to obtain insurance and RAC cover without the payment of any premium by the customer. The reason for this apparent change of heart by Ford is that, according to Ford's argument, the supply of the right to insurance policies and RAC membership, as opposed to the supply of a car, was an exempt supply by virtue of section 31 of and items 1 and/or 4 of Part 2 of Schedule 9 to the Value Added Tax Act 1994, so that, according to Ford, it is not liable to account for VAT on so much of the price paid by the purchaser of a car as represents consideration for the right to insurance and RAC cover without payment of any premium to the insurer or to the RAC.
4. One might think it lies ill in Ford's mouth to say that what it offered to a purchaser as free, in order to encourage the purchaser to buy one of its cars, in fact, for the purposes of Ford's VAT liability, was not free but in return for a consideration which had to be paid by the purchaser. However, that, as I understand it, is Ford's case and was its case put before the Tribunal. The relevant European and United Kingdom legislation is also very helpfully set out in the Tribunal's decision and I need not quote it all again.
5. Before considering the application of this law to the present case, I should refer to certain of the facts found by the Tribunal. The relevant sales of cars to members of the public were achieved in two different ways. Ford maintains a network of dealers in the United Kingdom through which cars are sold to the general public. Most of these dealers are independent of Ford.
6. FCE Bank plc, to which I shall refer as Ford Credit, is a member of the Ford group of companies and provides finance to purchasers of cars who wish to acquire cars on hire purchase or other credit terms. In such a case Ford sells the car to an independent dealer who then sells it on to Ford Credit, which sells it on to the actual customer. Ford Credit is part of the Ford VAT group. The dealer of course is not. In sales not involving Ford Credit, Ford sells to the dealer who sells to the actual customer. The sales relevant to Ford's claim to VAT relief in the present case include both sales by Ford Credit to customers and, in cases not involving Ford Credit, sales by Ford to independent dealers for on-sales to customers.
7. As part of its sales promotional activities, from time to time Ford offers through its dealers special deals or arrangements to purchasers of certain Ford models. Such offers are communicated to Ford by its dealers and then made available to customers on their purchase of cars from dealers or from Ford Credit.
8. As I have already said, the relevant sales in the present case were made pursuant to an offer by Ford to provide the customers purchasing certain specified models of car with "free" insurance cover and "free" membership of the RAC for a year in each case. The free insurance and free RAC cover were provided by Ford in a manner set out in some detail by the Tribunal in its decision. In my judgment, the Tribunal's findings in this regard can be summarised sufficiently for present purposes as follows.
9. Prior to October 1998 Ford had entered into an agreement with a company called Ford and Guardian Direct Services Ltd (to which I shall refer as Guardian Direct) which traded as RAC Insurance Services. Under that agreement Guardian Direct provided to purchasers of the relevant Ford cars comprehensive insurance cover for one year, the cost of which was paid by Ford to Guardian Direct. The cover was restricted to the policy holder and up to five other named drivers between the ages of 17 and 80. The policy holder was given no entitlement to a refund of premium if the policy was terminated before the renewal date, but this is hardly surprising since the policy holder paid no premium. Ford paid all the relevant premiums. The purchaser within the scheme has to acquire the car from a dealer or from Ford Credit, register it and then apply for the insurance policy to Guardian Direct. Ford was charged by Guardian direct with fixed premiums not reflecting the risk element in any particular policy.
10. On 20^th October 1998 Ford replaced the arrangement with Guardian Direct by an agreement with Norwich Union, the 1998 agreement. That agreement provided for Norwich Union to provide motor insurance for customers of Ford, both insurance for which the customers paid premiums to the Norwich Union in the usual way and insurance for which the premiums were to be paid by Ford under the free insurance offers which I have described, which insurance had previously been provided by Guardian Direct.
11. The principal provisions of the 1998 agreement were described by the Tribunal in paragraphs 19 to 21 of their decision which I think I should read. At 19:

"The 1998 agreement by Clause 2 made Ford the "agent" of Norwich Union "to make arrangements" on Norwich Union's behalf to enable Norwich Union to carry on the insurance business relating to Ford products. This included reviewing proposals from potential insurants, issuing policies, dealing with renewals, collecting premiums and settling claims. Ford gave an exclusivity undertaking to Norwich Union, (i.e. always to accept Norwich Union as the insurer unless a competing insurer offered better terms). The 1998 agreement was to last ten years and it covered "customer funded" and "free insurance". Free insurance was defined as "annual motor insurance provided free of charge to customers of Ford Motors in connection with the purchase of a car by them and in respect of which the premiums are paid by Ford." No commission was to be charged to Norwich Union by Ford under the free insurance programme."

Then 20:

"Clause 5.1 of the 1998 agreement gave Ford authority "to the extent permitted by the Binding Authority" to bind Norwich Union to a "Ford Contract", (i.e. a Norwich Union Ford Insure policy)" issued to an insured". Clause 25 enabled Ford, as Norwich Union's agent, to appoint subagents so long as approved by Norwich Union and those subagents might be Ford dealers. The subagents had power to bind Norwich Union within the framework of the Binding Authority."

Then 21:

"The Binding Authority of 7^l January 1999 between Norwich Union and Ford related exclusively to free insurance. It took effect from September 1998. It authorised Ford, which term included subagents, to bind Norwich Union to free insurance policies 'in the form attached to this Binding Authority' meeting certain eligibility criteria such as the models of Ford motor cars, the ages of the drivers (17 to 80) and the driving records (including convictions) of insurants and drivers. Other relevant provisions were: Clause 2.3 which directed that on cancellation of a free insurance policy no part of the premium was refundable. Paragraph 3.2 of Appendix 1 which enabled the insured to transfer the benefit of free insurance to another Ford model during the period of the free insurance policy but the insured who cancelled his free insurance was entitled to no refund."

12. The 1998 agreement contains certain other provisions relating to the insurance to be issued by Norwich Union under the free insurance arrangements including the following, namely (a) the insured could include four other named drivers to be covered by the policy; (b) the insured was to be able to qualify for maximum no claims discount in future years; and, (c) the proposed insured had to acquire the car, register it and then apply to Norwich Union for the insurance; (d) in the words of the Tribunal, "the insurance premiums were calculated on an average basis per unit." In later years certain changes were made in relation to the insurance to be issued by Norwich Union. In 2000 the policy terms were extended to cover the insured and other drivers driving with the permission of the insured. Named drivers could be added at additional cost. The insured was covered while driving other cars and the contents of the car belonging to third parties were covered. The new policy also covered passengers and "the domestic partner" of the insured whilst driving.
13. In 2002 a new Binding Authority was entered into between Norwich Union, Ford and Ford Credit changing the basis of calculation of premiums on such policies. For the first time they were to take account of the personal circumstances of the individual purchaser to be covered and, in particular, age and post code area in which the purchaser lived. Ford continued to pay all the premiums. A further Binding Authority was entered into on 23^rd January 2004, providing for the premiums to be calculated on what the Tribunal describes as "an actual risk, actual premium" basis, depending on age, location and driving history of the customer. Under the new arrangement the customer, on acquiring a car, had to telephone Norwich Union and answer some questions relevant to the assessment of the premium before being issued with a cover note by Norwich Union.
14. The Tribunal had before it a sample of what was called a customer pack comprising documents issued by a dealer to the customer buying a car under the free insurance promotion, including a dealer invoice for the sale and a specimen policy in the form to be issued by the insurer. According to the Tribunal's decision, the sample policy supplied to individual customers made it quite clear that no premium had been paid by the purchaser and the cover to be provided was described as "free comprehensive" insurance. The specimen invoices issued by dealers to customers purchasing pursuant to the promotion made no mention of the initial one year's free insurance cover.
15. The Tribunal found that "from the year 2000 to 2005, whilst the price of any vehicle in the model range within the free insurance offer fluctuated due to market pressure, at the time that the free insurance element was added to the purchase price of the car any other offers such as cash back were reduced. Therefore the price the customer paid for a vehicle increased." A comparatively small proportion of purchasers who purchased under the free insurance promotion did not take up the insurance. The price paid by them for the car was the same as that paid by the customers who did take up the insurance. Notwithstanding that, Ford does not claim that any sales to customers who did not take up the insurance fall within the ambit of its claim to be entitled to VAT relief.
16. So far as concerns the free RAC cover offered pursuant to the Ford promotion, that was provided to purchasers pursuant to an agreement between Ford and the RAC under which Ford paid the RAC the cost of that cover. The customer did not pay separately for it. The benefit passed to the customer included the right to preferential rates for RAC cover in future years after the first year which was paid for by Ford.
17. It is common ground that, for the purposes of the liability of the Ford VAT Group to VAT, the relevant sales of cars to the members of the public involved a taxable supply of the car, either by Ford Credit to the customer in a case where Ford Credit was involved, or by Ford to the dealer where Ford Credit was not involved. For some reason, the case was presented by the parties to the Tribunal on the basis that all relevant supplies, whether by Ford or by Ford Credit, were to the end purchaser. However, it is now, as I say, common ground that that is not in fact the case.
18. Ford contended before the Tribunal that it, or Ford Credit, was not accountable for VAT in respect of the whole price paid by the dealer or customer because that price was partly attributable to consideration for a supply of the insurance element comprising the so-called free motor and breakdown insurance. This latter supply, contended Ford, was exempt from VAT as being an exempt supply by virtue of section 31 of the 1994 Act. It was an exempt supply, according to Ford, because it was "an insurance transaction" within Item 1 of Group 2 in Schedule 9 to the 1994 Act or, alternatively, it was within Item 4 of Group 2 in Schedule 9 read in conjunction with Note (1) to Item 4.
19. In order to be an exempt supply the provision of insurance has to have been for consideration, because section 5(2)(a) of the 1994 Act provides that, subject to immaterial exceptions, "supply" for the purposes of the Act does not include anything done other than for a consideration.
20. Thus the Tribunal had to consider and determine three issues. The first was whether the provision by Ford or Ford Credit to a dealer or customer of the benefit of the insurance arrangements I have described was for a consideration consisting of part of the price paid by the dealer or customer on the relevant purchase. The second question was whether, if such provision was for such a consideration and therefore a supply for VAT purposes, it was an exempt supply within item 1 or 4 of Group 2 in Schedule 9 to the 1994 Act. The third question was whether, assuming it was an exempt supply looked at in isolation for VAT purposes, it had to be treated as subsumed into the standard rated supply of the car within the principle established by the European Court of Justice in Case 349 1996, Card Protection Plan [1999] Simons Tax Cases page 270.
23. The Tribunal decided that, in relation to sales in the period up to 23^rd January 2004 (in other words, within the period when the customer did not have to communicate with the insurer and answer questions to enable the insurer to decide whether the customer was eligible for insurance and to fix the premium to be paid by Ford), "as the purchasers could not know what the given insurance involved it would therefore be reasonable for them to assume that the insurance element was indeed free." After 23^rd January 2004 the Tribunal concluded in its words:

"the purchasers became aware there was an insurance element because of the enquiries that were made with them direct before the cover notes were issued. Therefore, the insurance element in the transaction became a separate consideration because the purchasers of the cars became aware that the price being paid was in reality apportioned over the cars as a whole applying Blackburne J's guidance."

24. I find this last sentence difficult to understand. The reference to Mr Justice Blackburne's guidance as to certain dicta of Blackburne J, in Peugeot Motor Company plc v Commissioners of Customs & Excise [2003] Simons Tax Cases 1438, which are set out in the Tribunal's decision. The Tribunal went on to conclude that, accordingly, the provision of the insurance and RAC benefits to a customer was for a consideration consisting of part of the price paid ostensibly for the car in the case of sales after 23^rd January 2004, but not in the case of earlier sales.
25. On the second question the Tribunal decided that the supply of insurance benefits on sales after 23^rd January 2004 was an exempt supply, as being a supply of insurance related services within Group 2 of Schedule 9 to the 1994 Act. On the third question the Tribunal decided that its answer to the second question did not avail Ford because the supply of insurance services was to be subsumed into the supply of a car and therefore as not to be treated as a separate exempt supply.
26. Ford now appeals and says that the Tribunal was right on question 2 but wrong on question 3 and wrong on question 1, to the extent that it distinguished between sales up to 23^rd January 2004 and those thereafter. It should have held in relation to all relevant sales that there was a supply of insurance benefits for a consideration being part of the price paid on the sale, that part being equal to the amount of premium paid by Ford to Guardian Direct or Norwich Union in respect of the particular sale concerned. The Respondent Commissioners, who put in a respondent's notice, contend that the Tribunal was right on question 3 but wrong on question 1 in respect of sales after 23^rd January 2004 and wrong on question 2. I will consider first the arguments on question 1.
27. Was the provision by Ford or Ford Credit to a purchaser of a car of insurance and RAC benefits for a consideration consisting of part of the price paid by the purchaser ostensibly for the car and, therefore, itself a supply for VAT purposes? It is common ground that the starting point in answering this question is the decision of the European Court of Justice in Kuwait Petroleum GB v Customs & Excise Commissioners, Case 48/97 [1999] Simons Tax Cases 488. In that case Kuwait Petroleum had operated a sales promotion scheme whereby customers buying fuel at service stations were offered vouchers which they were entitled to exchange for goods listed in a ("the redemption goods"). The price of the fuel was the same whether or not the customer accepted vouchers. The relevant question referred to the European Court of Justice by a VAT tribunal involved deciding whether the redemption goods had been disposed of free of charge within the meaning of those words in Article 5 (6) of the European Council Directive 77/388, (the Sixth Directive). In paragraphs 27 and following of its judgment the European Court said this:

"It is for the national court to enquire whether, at the time of purchasing the fuel, the customers and Kuwait Petroleum had agreed - through the dealers, as the case may be - that part of the price paid for the fuel, whether identifiable or not, would constitute the value given in return for the Q8 vouchers or the redemption of goods. There is nothing, however, in the documents before the court to suggest that there was any such reciprocal performance by the parties concerned.

As the Advocate General pointed out in paragraph 43 of his opinion, the sale of the fuel and the exchange of goods for vouchers are two separate transactions.

Moreover, there are two considerations in the case in the main proceedings which suggest that the exchange of goods for Q8 vouchers is a disposal free of charge within the meaning of art 5(6) of the Sixth Directive, and that the application of those goods is therefore to be treated as a supply for consideration and, accordingly, taxable.

First, under the sales promotion scheme set up by [Q8] Petroleum, the redemption goods were described as gifts.

Second, it is not contested that the retail price of Q8 fuel, whether or not the purchaser accepted the vouchers, was the same, and this was the only price referred to on the invoice relating to the fuel purchase which, pursuant to art 22.3 of the Sixth Directive, Kuwait Petroleum or the independent retailers had to issue to the customers who were themselves taxable persons. That being so, Kuwait Petroleum cannot reasonably maintain that, contrary to the statements on the invoices which it issued, the price paid by the purchasers of fuel in fact contain a component representing the value of the Q8 vouchers, all of the redemption goods."

28. Mr Anderson, on behalf of the Commissioners, submits with considerable force that, applying what was said by the European Court of Justice in that case to the facts of the present case, the answer must be that the insurance and RAC benefits were provided to dealers and customers free of charge. There is nothing in the findings of the Tribunal to suggest that the relevant customer or dealer had agreed with Ford Credit or Ford that part of the price payable for the car would constitute the value given for the insurance and RAC benefits. Quite the contrary; the benefits were advertised as free, the price of the car was the same whether those benefits were taken up by the customer or not, the invoices issued on the sale showed the price paid as being for the car with no reference to insurance or RAC cover. That being so, Ford cannot reasonably maintain that, contrary to the statements on the invoices which it or Ford Credit issued, the price paid by the purchaser in fact contained a component representing the value of the insurance and RAC benefit.
29. Mr Peacock, on the other hand, on behalf of Ford, seeks to escape the effect of what the European Court of Justice said in the passage I have just read from the Kuwait case on the basis of dicta of Mr Justice Laddie when the same case came before him on appeal from the Tribunal. The European Court of Justice remitted the actual question of whether the redemption goods had been paid for by the customers to the Tribunal, which decided they had not. Kuwait appealed and Mr Justice Laddie's decision to dismiss the appeal is reported at 2001 Simons Tax Cases 62.
30. In the light of arguments put on behalf of Ford I should read two substantial passages from that judgment Kuwait Petroleum (GB) Ltd v Customs and Excise Commissioners [2001] STC 62. First, at paragraph 23 of the judgment under the heading, "The test for determining whether a disposal is free of charge," Mr Justice Laddie said this:

"It seems to me that the starting point for deciding whether Mr Walters' objections [that's the taxpayer's objections] to the tribunal's findings have merit, is to appreciate what inquiry it should have undertaken to determine whether a disposal is "free of charge" within the meaning of those words within art 5(6). As both parties agree, this was addressed by the Court of Justice and is set out in the Kuwait judgment (see [1999] STC 488 at 509, [1999] ECR1-2323 at 2358, para 27)."

31. Then there is a reference to the passages I have read.

"What has to be determined is whether at the time of purchasing the premium goods the customers and Kuwait Petroleum had agreed, directly or indirectly, that part of the price paid for the premium goods, whether identifiable or not, would constitute the value given in return for the redemption vouchers or the redemption goods. It would be insufficient to prove that Kuwait Petroleum alone thought that the redemption vouchers and the redemption goods were being paid for by the customer through the price paid for the premium goods."

32. At 24:

"If the existence of such a consensus is the expressed and acknowledged view of the contracting parties then the goods are not disposed of free of charge and art 5(6) does not apply. However, here there was no such express and acknowledged view of the contracting parties. Both Mr Walters and Miss Whipple [counsel] agree that in those circumstances the inquiry is to be answered objectively. That is to say, the fact-finding tribunal has to determine what the ordinary customer, the driver of the (Clapham Ford Sierra), and Kuwait Petroleum should be taken to have agreed to at the time the premium goods were being purchased. That determination depends upon the inferences to be drawn from all the circumstances surrounding the transactions on the forecourt of the petrol stations. It is what the Tribunal did here. Mr Walters says it drew the wrong inferences."

33. Then starting at paragraph 31 of the judgment, Mr Justice Laddie says this:

"In addition to these points he [that is counsel for the appellant tax payer] directs criticism at the Tribunal's repetition and acceptance of the assumptions made by the Court of Justice in Kuwait (see [1999] STC 488 at 509, [1999] ECR 1-2323 at 2358, paras 27-31). Two have been the subject of particular criticism. The first of these was that there was nothing in the scheme documentation to suggest that customers were paying for redemption vouchers or redemption goods and the scheme literature described the redemption goods as 'gifts.' He says that these facts prove nothing. The documentation does not impact upon the objective nature of the transaction. Furthermore, the fact that the redemption goods were described as gifts does not make them so. That description does not hide the commercial reality. He gives as an example the trader who advertises his goods under the slogan 'Buy one get one free'. Could it seriously be suggested that the customer was getting the product for no cost?"

34. Then 32:

"The second Court of Justice point was that the only price indicated on tax invoices issued by Kuwait Petroleum or its agents related to fuel. There was nothing to suggest that any contribution was being made towards the costs of the vouchers or redemption goods. He says at most that this indicates that the invoices were incorrect in this respect. Again it does not impact on the nature of the transaction."

35. Then 33:

"In my view [says Mr Justice Laddie] none of these criticisms bears close scrutiny. First, it must be borne in mind that the Tribunal had to determine what both sides of the Kuwait Petroleum/retail customer transaction thought they were agreeing to. Thus, if the customers were led to believe, and reasonably did believe, that they were being given free vouchers and gifts, it is irrelevant that, as a matter of accounting, it can be shown that they were really paying for them. Were this not so, for all practical purposes there would never be circumstances where art 5(6) applied to commercial transactions because, like lunches, nothing is ever 'free'. One way or another, all the costs of running Kuwait Petroleum's business are funded in whole or in major part out of the money it realises from the sale of fuels. Thus, even if it be true that the promotion scheme ' caused' an increase in prices at the pump and ' supported' those prices, that does not address the question of what the customers thought they were agreeing to."

36. Then 34:

"Furthermore, I do not accept Mr Walters' criticism of the points which the Court of Justice in Kuwait thought were telling. The invoices supplied to the customers at petrol stations and the way in which the promotion was run by Kuwait Petroleum and its participating agents were likely to reinforce each other and convey to the customers the marketing message that they were indeed getting something for nothing. As far as the customer was concerned, he would pay the same price for his fuel whether or not he accepted the vouchers and whether or not he collected sufficient of them over a period of time to redeem them for any one or more of the redemption goods. He paid the same for his fuel if there was nothing in the Kuwait Petroleum catalogue which he wanted to acquire. It is no answer to the Court of Justice's, and the tribunal's reliance on the form of the invoices to say that they were incorrectly worded. They were only incorrectly worded if the redemption vouchers and the redemption goods were being paid for. If they were not, the invoices were correctly worded. In any event, I have said that what counts is what the customers thought they were agreeing to. Kuwait Petroleum and its agents went out of their way to make customers think that they were being given free gifts. That largesse was to be repaid by customer loyalty. Kuwait Petroleum can hardly complain if customers believe what it was telling them. In the light of these considerations, there is no difficulty in dealing with Mr Walters' argument in relation to a promotion of the 'buy one get one free' kind. There is a limit to the reasonable gullibility of ordinary members of the public. A promotion of that kind would not persuade most customers that they were really getting half of their acquisitions free. They would think that they were receiving each of the products at half price and that they were paying for both. They would be likely to regard the vendor's assertion that one product was being given free as little more than a puff. In such circumstances, if one asked the question posed by the Court of Justice in Kuwait, one receives the answer that the parties to the transaction did not believe they were agreeing to a disposal free of charge. That cynicism does not apply here. It is not, and cannot be, suggested that in this case the value of the redemption vouchers and redemption goods was so high relative to the amount of fuel purchased that reasonable customers would instinctively disbelieve the assertion that they were being given away free."

37. Mr Peacock relies on this latter dictum to this effect. He says that in the Kuwait Petroleum case the value of the vouchers was minimal compared to the value of the petrol bought by the customer. In the present case, on the other hand, the value of the insurance benefits was substantial. The Ford promotion was aimed by Ford particularly at young drivers who would have to pay a significant sum for such insurance, if they sought individual cover from an insurance company. Moreover, although in slightly different terms from time to time, the insurance cover provided valuable additional benefits including cover for the customer when driving another car, the possibility of transferring the cover to another Ford car, cover for additional drivers, and for contents of the car belonging to others, a right to cover for trailers and for passengers and the right to build up a no claims bonus. The RAC cover included entitlement to discount in future years. All these factors, submitted Mr Peacock, meant that the actual value of the insurance and RAC cover, especially in the case of a young driver, amounted to a substantial part of the value of the car, such that a customer could not reasonably have believed that he was getting those benefits free of charge. Indeed the Tribunal found, at paragraph 29 of the decision, that where the benefits were offered pursuant to the promotion, other offers such as cash back were reduced, so that in effect the offers of insurance increased what would otherwise have been charged for the car. Those facts, submitted Mr Peacock, bring this case much nearer the "buy one get one free" offer, which Mr Justice Laddie accepted no purchaser could reasonably believe, in the sense of believing he was paying nothing for one of the two items.
38. I do not accept Mr Peacock's submission. In my judgment, the relevant question posed by the European Court of Justice in the Kuwait case is whether, at the time of the relevant sale by Ford Credit to a customer, or Ford to a dealer, the customer or dealer and Ford or Ford Credit had agreed expressly or impliedly that part of the price paid for the car, whether identifiable or not, would constitute value given in return for the insurance and RAC benefits. The question is not, in my judgment, what the customer or dealer did or did not himself reasonably believe was the value of the benefits he was receiving. As in the Kuwait case, so in this case, there is nothing in the facts found to suggest any such agreement. Indeed the documentary evidence is all to the contrary effect, namely that the insurance and RAC benefits were being provided by Ford or Ford Credit free of charge to the purchaser. The purchaser was told repeatedly by Ford and Ford Credit that the benefits were free to the purchaser. The price charged for the car did not vary depending upon whether the purchaser took up the offer of insurance or RAC membership and the invoice issued to the purchaser showed the full price as being paid for the car alone. Ford in fact did everything it could to represent the deal as one in which no part of the price paid by the purchaser represented a price paid for the insurance.
39. That being so, Ford cannot now reasonably maintain that contrary to all those representations it made there was in fact an agreement between it and the purchaser that part of the price shown in the invoice issued to the purchaser as paid for the car was in fact not paid for the car but was paid for the insurance and RAC benefits (compare paragraph 31 of the judgment of the European Court of Justice in Kuwait [1999] Simons Tax cases 488 at page 509).
40. In my judgment, there is no justification for the Tribunal's answering issue 1 differently in relation to sales up to and including 23^rd January 2004 on the one hand, and sales after that date on the other. For the reasons I have endeavoured to give, it should have decided that in none of the sales concerned was any part of the price paid, paid as consideration for insurance and RAC membership.
41. It follows that Ford's appeal fails at the first hurdle, and the second and third questions dealt with by the Tribunal and argued before me do not arise for decision. In these circumstances, I think it undesirable that I should express any views on what should have been the answers to those questions, had they been material. I shall not do so. I shall simply dismiss the appeal.