Indirect tax-claiming input vat- help please

Alfiedodee

hi

can someone clarify a few things please?

i have practised these qs on green light and old pratice papers and have confused myself by looking at the hmrc website!

entertainment cant be claimed (unless an employee), other expenses such as substience (travel,petrol, food etc) can be claimed.

Cars can be claimed if business use only.

so what about a car for a company director- its not a taxi or lorry but stil business use? and what about food on the road..it can be claimed as they are travelling?

thanks

Sam22

Hi Alfiedodee,

I have my indirect exam tomorrow so currently revising this.

I am under the impression that you cannot claim back VAT on cars unless its soley for business use i.e you cannot take it home ready to use for the next day. The journey home would be considered private use. So the car is used exclusively for the business.

The only time you can claim back VAT on a car is if you are a taxi firm, driving school or hire car firm. You can also reclaim if you are a car dealer and intend to sell the car as part of your stock. You can also reclaim VAT on a van.

However the business has a number of ways where it can reclaim the VAT on fuel for the car.
1. If the car is for business use only all VAT for fuel can be reclaimed.
2. If the car is used for business and personal use then detailed records need to be kept and only the fuel used for business use can be reclaimed.
3. A business can opt to reclaim all it's VAT on fuel but they would need to pay a fuel scale charge.

Does this help?

Sam

Alfiedodee

It does thank you! Worry over as I had my test tonight and passed... This question wasn't even on it. Good luck for your exam x

Sam22

Well done!

I passed today as well! 2 more to go!

Alfiedodee

well done! my next is ethics...eek!

Sam22

Next for me is spreadsheets Friday then ethics in a couple of weeks.
Good luck!