HMRC have confirmed that taxpayers who make finance lease supplies, or who receive such supplies in relation to business cars and block some of the input tax incurred from deduction, need take no further action following the ECJ’s decision in the case of EON Aset Menidjmunt, C-118/11. The case suggest that, because the risks and rewards of ownership largely pass to the hirer in finance lease agreements, and because this is recognised in international accounting standards, supplies under finance lease agreements may be supplies of goods rather than supplies of services.

See http://www.hmrc.gov.uk/briefs/vat/brief3712.htm for full details.