Car leasing - what is allowable?
I know that you have to restrict the VAT by 50% to cover private use (where there is any). Does this mean the 50% VAT that is blocked is allowable for income tax purposes?
ie. Rental is Gross £200 (net £174.47). Amount of VAT blocked £12.76. Is the amount that will appear in the accounts £174.47 + £12.76 = £187.23 ?
If there is then a restriction of the lease payments under S578A ICTA if the cost of the car is < £12,000 do you apply the fraction (£12,000 + cost / 2 x cost) to the lease payments plus the 50% vat blocked (i.e the £187.23 as shown in the example above ?
Thanks in advance for any confirmation or corrective treatment administered.
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