VAT on motor vehicles

VAT on motor vehicles

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A client has just bought a Land Rover Discovery 4 Landmark Commercial. The windows and seating have been removed from the back of the vehicle. The total cost of the vehicle is nearly £61,000 (including VAT of £10,100). The vehicle can be used by both directors (man and wife) and the son (who is an employee in the business). The vehicle is kept next to the business premises which is about 1/4 of a mile from the house they live in. The insurance is business only and the vehicle will be used to collect materials for the business as well as delivering smaller products to customers and pulling a trailer. The vehicle is only used for business purposes.

1) Are they allowed to claim back all the Input VAT on the vehicle? I have read the leaflet on motor vehicles, and if I haven't missed anything, it appears to suggest that all Input VAT is reclaimable.

2) Capital allowances - would they be entitled to claim full First Year allowance?

Replies (5)

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Portia profile image
By Portia Nina Levin
26th Jan 2016 17:12

You do not mean FYA (low emissions cars). You mean AIA. If it is on HMRC's list, you can claim both the VAT and AIA.

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7om
By Tom 7000
26th Jan 2016 17:21

weird

Why would you pay £61k for a landrover and take it to bits when you could buy a transit for 15k or a mitsibushi l200 for 10k

Lets get the fish out on the table here... Before we advise on tax implications....

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Replying to bassett1:
Brunel
By Brunel
27th Jan 2016 06:30

Mafia

Tom 7000 wrote:

Why would you pay £61k for a landrover and take it to bits when you could buy a transit for 15k or a mitsibushi l200 for 10k

Lets get the fish out on the table here... Before we advise on tax implications....

I like the "fish on the table" phrase, I'll use it despite slight hint of mafia.

Interested to hear any experiences of HMRC attitude to 1) a very expensive van 2) kept walking distance from Directors' home.

Is there "Business only" insurance? Does it specifically exclude cover for Social, Domestic, Pleasure use?

Why didn't they buy a less expensive van?

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Portia profile image
By Portia Nina Levin
26th Jan 2016 17:23

I do not think the purchaser has taken any bits out Tom. I think the bits were taken out (by not having been put in in the first place) before purchase, if I am understanding the OP correctly.

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Replying to tim_g:
avatar
By rumpelstiltskin
26th Jan 2016 17:33

you are correct

Portia Nina Levin wrote:
I do not think the purchaser has taken any bits out Tom. I think the bits were taken out (by not having been put in in the first place) before purchase, if I am understanding the OP correctly.

The client paid nearly £3k to have all rear windows, seats and seat belts removed.
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