Client buys BMW Z3 to be used as company car. Three months latter he buys a hard top for it. Is the Vat reclaimable on the second purchase?
SC
Replies (3)
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Quote from Vat leaflet
"When you buy a car on which you cannot recover the VAT, you cannot reclaim the VAT you have been charged on accessories fitted to it. This applies even if the car dealer itemises them on the sales invoice or separately invoice them.
If you buy accessories later and the vehicle is either owned by the business or used in the business but not owned by it (e.g. an employer or director's own car), the VAT incurred is not input tax unless the accessory has a business use - for example, a radio telephone."
I think that covers the situation!