I have a client who is purchasing electric vehicles outright and then going to lease them out to customers. What is the VAT treatment?
- On the purchase of the vehicles can my client claim the VAT back on this purchase?
- Charging VAT - My client is going to be charging VAT to his customers for leasing the vehicles and paying this across in the usual routine process.
- The customers who are leasing the vehicles - do the recover 50% of the vat or full recovery?
Any guidance, links or assistance welcomed.
Thanks
Replies (11)
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1. yes
2. yes
3. it depends - don't fall into the trap of offering your customers VAT advice!
[quote=leshoward] ''3. it depends - don't fall into the trap of offering your customers VAT advice!''
Many of the website do, very badly imo. So agree totally and not just for that reason.
The cars are being leased out to customers so they're being used exclusively for the purpose of your client's business and won't be available for the private use of anyone, right???
Or does the director (or any other employee or the company) intend to use a car personally when its not on lease...
Why do people (whether you or your client in this case) feel that omitting to state the underlying objective means that it's not relevant ... despite it often turning all the answers gleaned so far on their head?
What conclusion have you come to so far?
I would have thought someone who will need to jump through several hoops to be in a regulated sector would be prepared to get some paid for advice from a VAT expert on this subject.
Why does (3) matter? Is he planning on giving tax advice to his clients?
Are the customers connected (corporate, family, etc) to the entity leasing the vehicles?
https://www.gov.uk/hmrc-internal-manuals/vat-input-tax/vit64680 (Tamburello case)
As Les has posted, what the customer can and cannot do is their problem.