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Car purchase - Vat reclaimed

07/08/2017 14:20:55
Hello,

I hope someone could advise on this topic.

My partner has purchased a brand new car for his business. He took a loan for it and received a vat invoice from a dealer as they received full payment for the car and my partner will be paying monthly instalments to the loan company for the next 5 years. Could you please advise if he can now claim the vat paid for it in full. He is due to du his vat return now. Just to add he is a sole trader registered for vat. This car is used for business purposes 28 days a month. We would use it once, twice a month when going away as I have my own car which is used daily.
Thanking you in advance.

Shelly
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Re:Car purchase - Vat reclaimed

08/08/2017 12:35:40
Hello Shelly
HMRC has a requirement that you will be using a purchased car exclusively for the purposes of your business and is not made available for the private use of anyone. Your car is available and is in fact used for a non business purpose therefore no input tax is reclaimable on the purchase of the car.

For input tax guidance relating to the purchase of a car please see the following link for Public notice 700/64 section 3:
https://www.gov.uk/government/publications/vat-notice-70064-motoring-expenses/vat-notice-70064-motoring-expenses#input-tax-on-purchasing-a-car