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VAT Notice 700/64 - claiming VAT on motor repairs

VAT Notice 700/64 - claiming VAT on motor repairs

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I have a query concerning VAT Notice 700/64

Para 5.1 seems to suggest that if a vehicle is used for business purposes you can claim VAT on repairs as input tax as long as the business paid for the work.  It states that it does not matter if the vehicle is used for private motoring or if you have chosen not to reclaim VAT on fuel.

There is no indication that any private restriction needs to be made to the VAT claim.  Therefore it seems to follow that even if a vehicle is used only 50% of the time for the business, provided the business pays the repair costs, the whole of the VAT can be reclaimed.

Please can anyone clarify that this is indeed the case?

Presumably however there is no way by extension that the whole of the net cost can be reclaimed as an expenses in the accounts?  Surely this cost must still be restricted to reflect only the business proportion?

Many thanks for any help

Replies (5)

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Portia profile image
By Portia Nina Levin
22nd Dec 2014 17:52

Yes

You can recover all of the VAT, where there is any business use.

No you cannot deduct all of the cost for direct tax purposes, if there is private use, assuming an unincorporated business.

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RLI
By lionofludesch
23rd Dec 2014 08:38

Scale Charge

The VAT scale charge covers you for all private motor expenses.  There are both winners and losers compared with the traditional apportionment method.

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By stephenpotter
23rd Dec 2014 09:36

Thank you both for your advice.

Portia, my client has opted not to claim any input tax on road fuel, does it follow that he is able to claim all of the input tax on motor repairs but not pay the fuel scale charge?

Many thanks

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Portia profile image
By Portia Nina Levin
23rd Dec 2014 09:45

Yes

The scale charge only relates to fuel. HMRC permit recovery of any input VAT on other running/maintenance costs when there is any business use.

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By stephenpotter
23rd Dec 2014 10:24

Thank you again Portia that really is very helpful

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