Cross charging of Car use between 2 companies

Company A has a works Car but Company A is not VAT Registered

Company B is VAT registered but sometimes has use of Company A's Car

A vehicle mileage record is logged to record the use etc of the car.


What would be the best way in order to cross charge the use of the Car from Company A to Company B ? Can Company B reclaim VAT on this?

Thanks in Advance for any help,

Richard

Comments

  • MarieNoelle
    MarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,433
    Hi @RichardCEvans
    I assume you mean a company car when you say "works car"?
    Who is driving the car?
  • RichardCEvans
    RichardCEvans Registered Posts: 6
    Hi MarieNoelle. This would be the company car that is used only for company trips e.g. from site to off site meetings, by employees. Car is never taken home by the employee nor ever used for personal use, only for business use. Richard
  • MarieNoelle
    MarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,433
    I believe company A can recharge what it likes. I would be more cautious if it was the same director using the car in both companies.

    Regarding VAT how can company B claim VAT on a supply where VAT hasn't been charged?
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