VAT on Car for Pub Owner

T.C.

I have a client who has never had a car worth more than a couple of hundred pounds, but has now spent £20,000 on a new car. He wants to know if he can claim back all or nearly all of the VAT on the car. It is used mainly for business and he has always claimed the majority of his car expenses for tax reasons, just never had to think about VAT before. Any opinions welcome.

andrewtdk

As far as i know you can't claim VAT back on cars other than cars like driving instructors with duel pedals. You can on vans and other commercial vehicles which is why a lot of people go for those mitsubishi warrior type vehicles as a compromise.

Im sure someone else here will confirm

AK002

No VAT on cars unless specific circumstances, which can be found on HMRC website (the above is not one though).

andrewtdk

AK002 when you state that the above is not one do you mean the Mitsubishi warrior? if so id be interested to know why this is the case?

According to Mitsubishi the vehicle meets the three conditions set by HMRC for VAT and BIK purposes so it would be useful to know why these conditions would be over ruled

groundy

andrewtdk wrote: »

AK002 when you state that the above is not one do you mean the Mitsubishi warrior? if so id be interested to know why this is the case?

According to Mitsubishi the vehicle meets the three conditions set by HMRC for VAT and BIK purposes so it would be useful to know why these conditions would be over ruled

Double cab pick ups are not acceptable when not relevant to the business. eg pub landlord does not need a warrior to carry out his business and therefore not allowable.

However, a builder, joiner etc or even any business that needs to carry large loads would be allowable

andrewtdk

Sorry yes i didnt make it clear i wasnt being specific about a pub landlord when i made reference to the mitsubishi, talking more about why a lot of builders have them as a compromise between a car and a van

AK002

andrewtdk wrote: »

AK002 when you state that the above is not one do you mean the Mitsubishi warrior? if so id be interested to know why this is the case?

According to Mitsubishi the vehicle meets the three conditions set by HMRC for VAT and BIK purposes so it would be useful to know why these conditions would be over ruled

Apologies, I meant to Original post when I was referring to 'above'.

deanshepherd

groundy wrote: »

Double cab pick ups are not acceptable when not relevant to the business. eg pub landlord does not need a warrior to carry out his business and therefore not allowable.

However, a builder, joiner etc or even any business that needs to carry large loads would be allowable

Do you have any case law to back that up?

It would be news to me and the many consultants/contractors I know that drive around in them..

T.C.

Thank you!

groundy

Dean

Not got the specific case law, it was something I remember hearing when attending a VAT course.

Apologies if I am mistaken as I would not want to offer misleading advice. It is something I look into further once all my tax returns are filed.

wildgoose1uk

Even if true could it not be argued that a Pub landlord would need a van like vehicle for trips to wholesaler etc and therefore a Warrior like vehicle could be justified.

burg

VAT is certainly not my strong point but I don't know of any case law that states a restriction on who can have a commercial vehicle?

Would be interested if there is.

However I would also agree with Wildgoose in that use could be justified by a publican for cash and carry etc.

payrollpro

My understanding is that th esituation is different depending on the tax you are dealing with. A double cab pick up was hit by changes to the benefit in kind rules when HMRC set a minimum carrying weight which knocked out many and made them cars for the purposes of the company car taxation computations. It took several years before the manufacturers managed to produce DC pick ups which could carry those loads so many of the original ones failed the criteria.

As far as VAT is concerned I think the rule must be applied differently because the vehicle must be exclusively for business in order for there to be an input tax recovery. The same rule applies to this as for company cars, if the vehicle is available for private use it cannot be considered exclusive and therefore is barred. If it is a dc pick up it must be capable of taking a one tonne payload, if not it is a car and if it fails the exclusivity test then it is a car available for private use.

I would agree with other posts here that for a variety of reasons the car the client has purchased does not carry a right of inout tax recovery.

PAMDILL

payrollpro wrote: »

My understanding is that th esituation is different depending on the tax you are dealing with. A double cab pick up was hit by changes to the benefit in kind rules when HMRC set a minimum carrying weight which knocked out many and made them cars for the purposes of the company car taxation computations. It took several years before the manufacturers managed to produce DC pick ups which could carry those loads so many of the original ones failed the criteria.

As far as VAT is concerned I think the rule must be applied differently because the vehicle must be exclusively for business in order for there to be an input tax recovery. The same rule applies to this as for company cars, if the vehicle is available for private use it cannot be considered exclusive and therefore is barred. If it is a dc pick up it must be capable of taking a one tonne payload, if not it is a car and if it fails the exclusivity test then it is a car available for private use.

I would agree with other posts here that for a variety of reasons the car the client has purchased does not carry a right of inout tax recovery.

I was involved in a PAYE inspection while with a construction company where they were trying to hit the driver of a double cab pickup for benefit in kind as he was one of the directors ' so surely did not use it for carrying equipment etc' just at that moment up pulled the vehicle with a pallet of cement on the back. I won that point.

A couple of months later a VAT inspector came for an inspection and tried to argue the point about the VAT claimback for same vehicle as it should be classed as a car. Fortunately that day it was parked on site with a whacker plate and various other tools on the back so that was the end of that argument. These were both around the time when Mistubishi and Nissan were bringing ot the fancier models and companies were buying them to cut down on Class 1A NIC.