Starting up:
Can I reclaim all the VAT on my motor expenses?
The treatment of motor expenses as regards income tax relief and whether or not you can reclaim the VAT is quite complex.
Read about the income tax treatment
As regards reclaiming the VAT, you are able to reclaim just 50% of the input tax for the cost of car leasing regardless of the price of the car.
With the exception of car fuel, you can claim back the VAT on all your motor expenses in full.
For car fuel, there are special rules. You claim back the VAT in full but work out the private proportion by reference to a scale charge. The scale relates to the engine size and whether the car is petrol or diesel. The scale charge is added to the output tax declared on your VAT Return and paid over as normal.
If your business mileage is very low, you may find that you are better off choosing not to reclaim any VAT on fuel and therefore avoid the scale charge entirely. We can work out which is the best option for you, based on your personal circumstances.
You are able to reclaim the VAT on business car parking. In contrast to the treatment of car parking at the business premises for income tax purposes, you are able to reclaim the VAT input tax.
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Where next?
Within VAT …
- what is VAT?
- Should I be registered for VAT?
- Should I register for a VAT accounting scheme?
- VAT records
- Tax point
- Completing your first VAT return
Within Starting up …
- Developing your business idea
- Your business structure
- Setting up
- Accounting systems
- Payroll and PAYE
- National Insurance contributions
- Income tax
- Corporation tax
General ...
- Contact us about this issue
- Read about how we can help you & your family
- Request a meeting with us
