{"id":3911,"date":"2021-08-31T06:56:42","date_gmt":"2021-08-31T06:56:42","guid":{"rendered":"https:\/\/way2vat.com\/?p=3911"},"modified":"2022-10-31T06:59:45","modified_gmt":"2022-10-31T06:59:45","slug":"vat_gst-recovery-on-cars-and-expenses","status":"publish","type":"post","link":"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/","title":{"rendered":"VAT\\GST Recovery on Cars and Expenses"},"content":{"rendered":"

Many businesses provide cars and fuel for their employees use.\u00a0 Sometimes the car may be required for business journeys by the employee.\u00a0 In some cases, the car is provided as part of the employee\u2019s salary package.\u00a0 In most cases even where an employee needs the car to perform his work the employee will also be entitled to make use of the car for priVAT\\GSTe purposes. Since many business cars are not solely used for business, VAT\\GST recovery of the purchase and leasing of cars is restricted under the VAT\\GST rules.<\/span><\/p>\n

Purchase of Cars\u00a0<\/b><\/h3>\n

There is a 100% block on recovering VAT\\GST on the purchase of a car by a VAT\\GST registered business.\u00a0 This applies to the majority of cars purchased by businesses.\u00a0 HMRC take the view that as long as a car is available for priVAT\\GSTe use VAT\\GST is blocked in full.\u00a0\u00a0<\/span><\/p>\n

This block of input VAT\\GST recovery also applies to electric vehicles.\u00a0 While there are tax reliefs for electric vehicles VAT\\GST is still blocked.\u00a0\u00a0<\/span><\/p>\n

HMRC do allow businesses who use cars \u201cexclusively for business use\u201d to recover VAT\\GST.\u00a0 A car is used exclusively for business purposes if it is used only for business and it is not available for priVAT\\GSTe use. In practice this means VAT\\GST can be recovered only when the car is kept at the business premises, it is\u00a0<\/span><\/p>\n

not allocated to an individual and not kept at an employee\u2019s home. HMRC are extremely strict about VAT\\GST recovery and will typically challenge VAT\\GST recovery.\u00a0\u00a0<\/span><\/p>\n

When Can VAT\\GST recovered?\u00a0<\/b><\/h3>\n

VAT\\GST is also recoverable if a car is purchased by a motor dealer, a car intended to be used primarily as a taxi, driving instruction car, or self-drive hire.\u00a0 If a business purchases a car for one of these purposes and recovers the VAT\\GST and subsequently the business changes the use of the car, then a self-supply charge may apply which could result in the business having to pay back the VAT\\GST.\u00a0\u00a0\u00a0<\/span><\/p>\n

Car-Derived Vans and Combination Vans\u00a0<\/b><\/h3>\n

In contrast to the above, a business can recover VAT\\GST on a commercial vehicle such as a van.\u00a0 There are certain cars which are altered to provide the functionality of a van.\u00a0 HMRC have produced a list of car derived vans and vans with rear seats (combi vans) and duel cab pick-ups, showing whether they’re classed as a commercial vehicle or a car for VAT\\GST purposes. As vehicle specifications often change the list may not always be up to date, so businesses should check with HMRC before reclaiming the VAT\\GST.\u00a0<\/span><\/p>\n

In practice many dealers are able to advise if the vehicle is one which can be treated as a commercial vehicle and therefore eligible for VAT\\GST recover.\u00a0<\/span><\/p>\n

If a van is put to priVAT\\GSTe use, HMRC may require the business to account for output VAT\\GST to represent the priVAT\\GSTe usage element.\u00a0<\/span><\/p>\n

Secondhand Cars<\/b><\/h3>\n

It follows that if a business is unable to recover VAT\\GST when purchasing a car, it does not need to account for VAT\\GST when it sells the car.\u00a0 Such a sale is treated as an exempt supply from a VAT\\GST perspective.\u00a0\u00a0<\/span><\/p>\n

It is worth remembering that most purchases of secondhand cars are not subject to VAT\\GST.\u00a0 When a business purchases a secondhand car there will be no VAT\\GST on the invoice and therefore no VAT\\GST may be recovered.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Many businesses provide cars and fuel for their employees use.\u00a0 Sometimes the car may be required for business journeys by the employee.\u00a0 In some cases, the car is provided as part of the employee\u2019s salary package.\u00a0 In most cases even where an employee needs the car to perform his work the employee will also be […]<\/p>\n","protected":false},"author":1,"featured_media":3912,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[26,1],"tags":[],"class_list":["post-3911","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-vatgst"],"acf":[],"yoast_head":"\nVAT\\GST Recovery on Cars and Expenses - w2v<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"VAT\\GST Recovery on Cars and Expenses - w2v\" \/>\n<meta property=\"og:description\" content=\"Many businesses provide cars and fuel for their employees use.\u00a0 Sometimes the car may be required for business journeys by the employee.\u00a0 In some cases, the car is provided as part of the employee\u2019s salary package.\u00a0 In most cases even where an employee needs the car to perform his work the employee will also be […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/\" \/>\n<meta property=\"og:site_name\" content=\"w2v\" \/>\n<meta property=\"article:published_time\" content=\"2021-08-31T06:56:42+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-10-31T06:59:45+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/way2vat.com\/wp-content\/uploads\/2021\/08\/CARS.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"627\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"elad@finext.co.il\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"elad@finext.co.il\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/\",\"url\":\"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/\",\"name\":\"VAT\\\\GST Recovery on Cars and Expenses - w2v\",\"isPartOf\":{\"@id\":\"https:\/\/way2vat.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/way2vat.com\/wp-content\/uploads\/2021\/08\/CARS.jpg\",\"datePublished\":\"2021-08-31T06:56:42+00:00\",\"dateModified\":\"2022-10-31T06:59:45+00:00\",\"author\":{\"@id\":\"https:\/\/way2vat.com\/#\/schema\/person\/58171f6e00c988121574f5cc9bdc2f06\"},\"breadcrumb\":{\"@id\":\"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/#primaryimage\",\"url\":\"https:\/\/way2vat.com\/wp-content\/uploads\/2021\/08\/CARS.jpg\",\"contentUrl\":\"https:\/\/way2vat.com\/wp-content\/uploads\/2021\/08\/CARS.jpg\",\"width\":1200,\"height\":627},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/way2vat.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"VAT\\\\GST Recovery on Cars and Expenses\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/way2vat.com\/#website\",\"url\":\"https:\/\/way2vat.com\/\",\"name\":\"w2v\",\"description\":\"Just another WordPress site\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/way2vat.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/way2vat.com\/#\/schema\/person\/58171f6e00c988121574f5cc9bdc2f06\",\"name\":\"elad@finext.co.il\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/way2vat.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/270b9d0ffca074ddbdf17bef4d6ab751?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/270b9d0ffca074ddbdf17bef4d6ab751?s=96&d=mm&r=g\",\"caption\":\"elad@finext.co.il\"},\"sameAs\":[\"https:\/\/way2vat.com\"],\"url\":\"https:\/\/way2vat.com\/author\/eladfinext-co-il\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"VAT\\GST Recovery on Cars and Expenses - w2v","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/","og_locale":"en_US","og_type":"article","og_title":"VAT\\GST Recovery on Cars and Expenses - w2v","og_description":"Many businesses provide cars and fuel for their employees use.\u00a0 Sometimes the car may be required for business journeys by the employee.\u00a0 In some cases, the car is provided as part of the employee\u2019s salary package.\u00a0 In most cases even where an employee needs the car to perform his work the employee will also be […]","og_url":"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/","og_site_name":"w2v","article_published_time":"2021-08-31T06:56:42+00:00","article_modified_time":"2022-10-31T06:59:45+00:00","og_image":[{"width":1200,"height":627,"url":"https:\/\/way2vat.com\/wp-content\/uploads\/2021\/08\/CARS.jpg","type":"image\/jpeg"}],"author":"elad@finext.co.il","twitter_card":"summary_large_image","twitter_misc":{"Written by":"elad@finext.co.il","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/","url":"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/","name":"VAT\\GST Recovery on Cars and Expenses - w2v","isPartOf":{"@id":"https:\/\/way2vat.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/#primaryimage"},"image":{"@id":"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/#primaryimage"},"thumbnailUrl":"https:\/\/way2vat.com\/wp-content\/uploads\/2021\/08\/CARS.jpg","datePublished":"2021-08-31T06:56:42+00:00","dateModified":"2022-10-31T06:59:45+00:00","author":{"@id":"https:\/\/way2vat.com\/#\/schema\/person\/58171f6e00c988121574f5cc9bdc2f06"},"breadcrumb":{"@id":"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/#primaryimage","url":"https:\/\/way2vat.com\/wp-content\/uploads\/2021\/08\/CARS.jpg","contentUrl":"https:\/\/way2vat.com\/wp-content\/uploads\/2021\/08\/CARS.jpg","width":1200,"height":627},{"@type":"BreadcrumbList","@id":"https:\/\/way2vat.com\/vat_gst-recovery-on-cars-and-expenses\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/way2vat.com\/"},{"@type":"ListItem","position":2,"name":"VAT\\GST Recovery on Cars and Expenses"}]},{"@type":"WebSite","@id":"https:\/\/way2vat.com\/#website","url":"https:\/\/way2vat.com\/","name":"w2v","description":"Just another WordPress site","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/way2vat.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/way2vat.com\/#\/schema\/person\/58171f6e00c988121574f5cc9bdc2f06","name":"elad@finext.co.il","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/way2vat.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/270b9d0ffca074ddbdf17bef4d6ab751?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/270b9d0ffca074ddbdf17bef4d6ab751?s=96&d=mm&r=g","caption":"elad@finext.co.il"},"sameAs":["https:\/\/way2vat.com"],"url":"https:\/\/way2vat.com\/author\/eladfinext-co-il\/"}]}},"_links":{"self":[{"href":"https:\/\/way2vat.com\/wp-json\/wp\/v2\/posts\/3911","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/way2vat.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/way2vat.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/way2vat.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/way2vat.com\/wp-json\/wp\/v2\/comments?post=3911"}],"version-history":[{"count":1,"href":"https:\/\/way2vat.com\/wp-json\/wp\/v2\/posts\/3911\/revisions"}],"predecessor-version":[{"id":4567,"href":"https:\/\/way2vat.com\/wp-json\/wp\/v2\/posts\/3911\/revisions\/4567"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/way2vat.com\/wp-json\/wp\/v2\/media\/3912"}],"wp:attachment":[{"href":"https:\/\/way2vat.com\/wp-json\/wp\/v2\/media?parent=3911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/way2vat.com\/wp-json\/wp\/v2\/categories?post=3911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/way2vat.com\/wp-json\/wp\/v2\/tags?post=3911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}