Is it possible to claim Vat back on Car?

abelard · Apprentice Joined: 08 Dec 2005 Posts: 10

In order to improve conditions for my employees, I’ve decided to finally buy cars which they would use instead of their own vehicles. When I wrote that I’ll be looking for employees, I’ve told them that it is required for them to have their own car, that was one of few conditions. These are second hand cars and I believe that I can claim VAT back, but I’m not sure?!

pen · Apprentice Joined: 14 Jun 2004 Posts: 7

It is important to tell if you were using those cars only for business purposes, but (honestly) who is going to check if you were not. But, that is one of the conditions, and I believe that you can claim VAT back. How many cars are we talking about? I am not sure, but it can be that the number is important issue here.

spidersong · Apprentice Joined: 11 Jul 2008 Posts: 2

I'll tell you who'll check the VAT man will. I spent 16 years in the VAT office, 6 of them as an inspector and every visit we would check whether VAT on car purchases had been treated correctly and assess for any recovered in error.

Point a) if they're second hand cars then chances are any VAT falls under the 'second hand scheme' which is VAT that you cannot recover, as it's not charged on the full price of the vehicle.

point b) if you are actually charged VAT then in order to recover it you have to prove that the vehicles are never available for private use, which includes home to work journeys. You'd need to show that either they were only insured for business purposes, and that there was some bar within the employees terms and conditions to stop them having any private use of the vehicle, they'd also need to be true pool cars so not individually allocated to employees.

Is it possible to claim Vat back on Car?

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