JohnSmith

Can you claim the vat back on the purchase of a car for business or can it only be claimed back for vans?

and I assume it is only for new vehicles too as im sure I have read there are different rules for 2nd hand depending on whether vat has already been paid etc?

its a minefield LOL

JohnSmith

or another question is,

is there any benefit to my business buying a car over me buying one personally (company is vat reg'd)

ScoobyWon't

If you purchase any second hand vehicle which VAT was claimed back on by the previous owner, then the new purchaser is liable for paying the tax. If the buyer is also VAT registered, then they can claim the VAT back too.

Commercial vehicles and cars both operate this way. A private purchase of a vehicle is quoted inc VAT, while for business purchases they are usually quoted + VAT.

If you buy the car privately, you cannot claim the VAT back, but you can lease it from yourself to the company, which is a nice way to get some extra money each month instead of it being in your wages.

JohnSmith

other than claiming the vat back on a brand new car then, are there any benefits to business buying the car

Scooby Soon!

you can not claim back the vat on a straight forward car purchase unless it is on lease then i think its only about 50%

speak to your accountant there are many schemes and benifits that will saves you £'s if your let the company buy the right type of car

JohnSmith

Thats what I wanted to know lol

They just told me stick to claiming the 45p a mile amap rates and let the business claim the vat back on the fuel element etc

but I will need a new vehicle for work in the future as the current one is getting a little old and tired

JohnSmith

This seems to explain things a little

http://www.hmrc.gov.uk/vat/managing/...motoring.htm#1

Wild Thing

If the car is a vat qualifying vehicle you can claim the vat back, but you also have to pay the revenue vat on the final sale of the vehicle. It all depends what way the car was initially purchased.

Silver Knight

You can only claim back the Vat if you can prove the car will be 100% business use, and not many can do that, driving schools,hearses and a few others.
The vat man will check mileages driven and declared
Its not worth the hassle.
If the company buys the car it gets tax advantages but you will be charged as having a company car on PAYE

JohnSmith

Yeah I had thought of that but I record everything so easy enough to prove sole business use

A Van would be much easier but I dont want the extra hassle associated with having a van (tools in car, cat theft, happens a lot around here, break ins to check for tools etc)

Neanderthal

iTrader: (6)

My accountant said the same thing. Was hoping for more of a 'if you do this, you can claim this, which will effectively mean you're saving a car load of money'. Sadly not.

Scooby Soon!

surely you can claim the VAT back OR the 45p mile allowance not both?

JohnSmith

We have been down this road before on here LOL

I claim the 45p a mile, the company claims the VAT back on the fuel element only (18p a mile)

Scooby Soon!

found details here http://www.is4profit.com/business-ad...-recovery.html depends on car engine etc

JohnSmith

Yes, but that is outdated now as the rate is 45p per mile for the first 10k miles then I think its 24 or 25p a mile thereafter

My accounts software has the rates pre defined using the government guideines so I only have to tell it engine size etc and it works out the VAT for me, The only thing I dont know if it will do is automatically start recording at the lower rate once I have reached 10k miles as I have to put the miles in for it to work out all the figures