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VAT reclaim on VW T32 Kombi Highline

Our client has purchased the above vehicle - can input VAT be reclaimed.

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The vehicle has windows and seats to the rear. I understand that for BIK purposes these vehicles have recently been classified has cars. Does this have an impact on the VAT situation?

Do we need to also look at the payload of the vehicle or is that irrelevant if the windows and rear seats are in place?

Replies (9)

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Psycho
By Wilson Philips
17th Sep 2019 13:57

It will depend on the exact specs but generally one tax follows the other. If you're happy that the vehicle should be treated as a car for income tax purposes then the same should apply for VAT. The payload could be important, though - although if it has an extra row of seats I doubt that payload would exceed the 1 tonne requirement.

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Replying to Wilson Philips:
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By The Dullard
18th Sep 2019 10:36

I don't think one does necessarily follow the other. The two tests are different:
- for VAT if there are (roofed) seats with windows behind the driver, and the payload is under 1 tonne, then subject to the other finer tests, you have a motor car.
- for income tax purposes it's a car unless it is a van, which is a vehicle whose CONSTRUCTION is PRIMARILY suited to the carrying of goods or burden.

Whilst for the latter purpose HMRC have accepted that double-cab pick ups with a payload of at least a tonne satisfy the definition of a van, they are taking a more rigid approach to these combi vehicles and seem to only be accepting them as vans where the payload is a tonne or more AND there is a bulkhead separating the goods/burden and passenger areas.

The former test is an objective one and the latter test is a subjective one. So the VAT question should be easily answered, but the income tax question is much less easily answered.

So, whilst I agree that if you correctly conclude that for income tax purposes a vehicle is a van, then it is likely that it is not a motor car for VAT purposes.

However, the correct approach is to apply the VAT tests for VAT purposes and the income tax tests for income tax purposes.

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By paul.benny
17th Sep 2019 13:33

It will depend on the exact specification of the vehicle and the uses to which it is put.

Try looking at VIT50900 for the VAT treatment and EIM 23100 for bik.

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By SteLacca
17th Sep 2019 13:37

Is there going to private use?

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By thomas34
17th Sep 2019 13:58

This vehicle is a tax disaster for owners of this particular make of Combi van. VAT is reclaimable as a van but for BIK purposes it's a car (see the case of Noel Payne). Bizarrely a Vauxhall Vivaro similar vehicle is a van for both VAT and BIK.

I believe this is a case that needs testing in the highest court as it doesn't feel right.

If you search back through Aweb you'll find an article about 3 months ago.

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By thomas34
17th Sep 2019 18:41

Have reread the original excellent article and the goods news is that it may be going to the Court of Appeal. That's good news because I must admit I thought it would have to go to the Supreme Court. Anybody got any advice about what I should advise my client with one of these and how I treat his SATR?

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By The Dullard
18th Sep 2019 10:37

To answer the OP's question, the 1+ tonne test does trump the roofed seated accommodation with side windows test for VAT purposes.

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Morph
By kevinringer
23rd Sep 2019 13:27

Re payload checkout https://www.volkswagen-vans.co.uk/content/dam/vw-ngw/vw_nfz/importers/gb... page 37. Payload for the T32 Highline varies between 903 kg and 1119 kg. One model is 998 kg so fails by a mere 2 kg! Always check that the manufacturer's definition of payload agrees which HMRC's because there are different definitions. HMRC's VAT definition is at https://www.gov.uk/hmrc-internal-manuals/vat-input-tax/vit50300.

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