12th April 2019
News, Tax
CHW Accounting
You can usually reclaim the VAT paid on goods purchased for use in your business. However, with vehicles these often include an element of personal or private use
In our latest article we explain the rules regarding reclaiming VAT on vehicle purchases.
Generally speaking, the purchase of any vehicle where there is any element of private use means any reclaim of VAT may be restricted.
You may be able to reclaim all the VAT on a new car if it is used only for business. The car must not be available for private use, and you must be able to prove that it isn’t – for example if it is specified in your employee’s contract.
Private use does include travelling between home and work, unless it’s a temporary place of work.
It is unusual for vehicles to be restricted to zero private use and therefore, it is usual that no VAT can be recovered on the purchase of a car.
However, you may be able to claim all the VAT on a new car if it’s mainly used as a taxi, for driving instruction or for self-drive hire.
If you are buying a commercial vehicle such as a van, lorry or tractor, you can usually reclaim the VAT if you only use it for business.
Likewise, if they’re used only for business, you can also reclaim VAT on motorcycles, motorhomes and motor caravans, vans with rear seats (combi vans) and car-derived vans
If you are in any doubt whether a proposed vehicle purchase is eligible for a VAT reclaim there is guidance on the HMRC website or you can contact us for advice.
Grab a biscuit and a brew and read our latest news.
8 March 2022
Temporary reduced VAT rate for leisure and hospitality to...
On 8 July 2020, as an urgent response to the pandemic, the government announced a number of VAT measures including a temporary reduction of the VAT…
1 March 2022
National Minimum and National Living Wage changes April 2022
From 1 April 2022, the government is increasing but the National Minimum and National Living Wage rates. The National Minimum Wage is the minimum amount an…
22 February 2022
Dividend taxes to rise from 6 April 2022 –...
The government has confirmed that it will not be backing down on the planned hike in National Insurance (NI) and dividend tax from April 2022. There…
10 January 2022
Late filing and late payment penalties are to be...
HMRC has given self-assessment taxpayers more time to ease COVID-19 pressures. With the self-assessment deadline less than three weeks away, many individuals and agents will be…
7 January 2022
Making tax digital for VAT – April 2022 –...
Since 1 April 2019, VAT-registered businesses with a turnover above the VAT registration threshold of £85,000 have been required to keep their records digitally and provide…
No matter what your challenge is, we’ve probably dealt with it before.