VAT On Vehicles

TALLY
TALLY Registered Posts: 22 New contributor 🐸
in AAT Level 4 (Level 8 in Scotland)
Hi everyone,
I'm not at technician level, if I were I guess that I would know the answer to this question. But I thought if anyone would know it would be you guys. The question is can you claim the VAT back on a company car? I work for a charity that is partial exempt.

Thanks for replies. :001_unsure:

Comments

  • Jon_1984
    Jon_1984 Registered Posts: 186 Dedicated contributor 🦉
    The General rule is you cannot claim back VAT on cars but can on Vans, hence a lot of contractors getting pick ups at the moment. I dont think the partial exemption/charity status affects this.
  • Peter W
    Peter W Registered Posts: 22 New contributor 🐸
    VAT can be reclaimed on a car if it is used 100% for business, or if it is a taxi, or for use by a driving instructor, or for use as self-drive hire.
  • mark057
    mark057 Registered Posts: 354 Dedicated contributor 🦉
    I'm afraid the VAT cannot be reclaimed on the car unless there is proof the car is used 100% for charitable/business activities and the charity is registered for VAT.

    Don't forget the VAT on fuel expenses and maintenance costs e.g. servicing can be reclaimed if the charity is registered for VAT.

    You can either claim all of the VAT back on fuel and maintenance costs if the car is used 100% for charitable activities.

    If not then use an appropriate method of apportionment e.g. miles driven to differentiate between what VAT to reclaim or not. Only reclaim the proportion of VAT relating to miles driven for the purposes of the charity.

    Apportioning these VAT costs mean you will also be able put all the VAT to be reclaimed in the taxable pot concerning the partial exemption calculation, although if the VAT to be reclaimed does not breach the de-minimus limit you can claim the lot anyway.
  • mark057
    mark057 Registered Posts: 354 Dedicated contributor 🦉
    Should point out though that not all of the VAT could be reclaimed on the fuel expenses and maintenance costs if some of the cars use was in connection with making non-taxable supplies, even if the car was used for charitable purposes.

    VAT expenses directly incurred in connection with the supply of non-taxable supplies cannot be reclaimed under partial exemption rules and VAT expenses incurred in connection with the supply of both taxable and non taxable supplies would have to follow the de-minimus rules.

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