VAT rebate

[Darren cryne]

Hi.
Anyone bought a Cali this year through a business and claimed the vat back.
I have read the previous posts on this and it's still confusing.
Anyone claimed the vat back recently.
Thanks for any advice

 

[teeboy]

I am no VAT expert, but looking at HMRC it looks pretty clear cut:

https://www.gov.uk/reclaim-vat/cars
https://www.gov.uk/hmrc-internal-manuals/vat-input-tax/vit51200

So if it is an SE/Ocean - it looks like it counts as a motorhome.

Then if it is used 100% for business then you can claim the VAT back, i.e. if it is used for client meetings, conferences etc. If you use it for holidays, or let employees use it for holidays you may be on dodgy ground.

 

[Geezso]

Its a diesel car, non commercial. If you want to claim your vat buy a van then convert.

 

[jts46]

We claimed the VAT back on our bilbos nectar purchase in 2003, wife's mother was disabled so we had wheelchair clamps installed, letter from doctor = VAT refund.
I also used my cali 2006 model for business use and claimed VAT back on running costs

 

[Fryers!]

We hire our Cali out and decided to become VAT registered before we purchased it meaning our £48,000 Cali only cost us around £39,800 after getting the VAT back, this really helped with cashflow. Possibly different scenario to yourself but might be useful to anyone looking to hire out their van. Also meant we could claim VAT back on all the accessories ( bike rack, cali topper, seat covers etc.. ) We only hire the van out for 3 months of the year and is a very economical way of owning a Cali.

 

[2into1]

We hire our Cali out and decided to become VAT registered before we purchased it meaning our £48,000 Cali only cost us around £39,800 after getting the VAT back, this really helped with cashflow. Possibly different scenario to yourself but might be useful to anyone looking to hire out their van. Also meant we could claim VAT back on all the accessories ( bike rack, cali topper, seat covers etc.. ) We only hire the van out for 3 months of the year and is a very economical way of owning a Cali.

You might not want the Inland Revenue to see this level of detail, unless of course you are only reclaiming a part of the vat.

 

[BerndRos]

Exactly.

HMRC will expect you to run your hire business as a going concern to the best of your ability and pay tax accordingly. They will also be interested regarding your private use and expect to disallow that portion against the initial VAT claim back and ongoing expenses claim back.

 

[Fryers!]

We did speak to the vat office before we started our venture and explained the business is seasonal. They did not say we could only claim a portion back.

 

[BerndRos]

We did speak to the vat office before we started our venture and explained the business is seasonal. They did not say we could only claim a portion back.

That's what accountants are for....to negotiate with HMLR on your behalf and to act in accordance with their professional rules. Think you will find it difficult to get any accountant to file your accounts or tax return based on what you have said without taking into account your private usage. Best you check this out carefully if I were you.

 

[Kevthegas]

Benefit in kind (bik) on £48k worth of Cali = ouch !!

 

[2into1]

We did speak to the vat office before we started our venture and explained the business is seasonal. They did not say we could only claim a portion back.

You clearly didn't ask the right question (well maybe you asked the question you needed to to get the answer you wanted). In my experience, the authorities rarely answer individual questions like that; they refer you to a document or tell you to take professional advice.

The 'portion' allowable would need to be debated (miles / days of rented vs private would be a starting point). Your post clearly gives the impression the Cali is yours, and you rent it in peak periods. If it's only a 3 month season as you imply, to get 100 vat allowable, you'd need to store it parked up for the other 9 months. As soon as you use it for a family day out, you have to take your personal share of the initial and ongoing expenses, and vat.

 

[motacyclist]

You can claim the VAT back on anything. Until you get a VAT audit. They don't let go until they find something. I know!

 

[Stoneybroke]

My understanding of vat rules means that, because you are VAT registered, you will have to charge VAT when the vehicle is sold and that will go to the VAT man, the next buyer will probably be a private buyer and will have to pay. The government always wants the VAT at some stage - might put off buyers...

 

[Amarillo]

The 'portion' allowable would need to be debated (miles / days of rented vs private would be a starting point). Your post clearly gives the impression the Cali is yours, and you rent it in peak periods. If it's only a 3 month season as you imply, to get 100 vat allowable, you'd need to store it parked up for the other 9 months. As soon as you use it for a family day out, you have to take your personal share of the initial and ongoing expenses, and vat.

I think that the VAT man, if he paid a visit, would expect a log of business/personal mileage. You might find them sufficiently lenient to overlook 1 or 2% personal use, for example when the family car is in for a service, but much more than that and you would find them digging and digging for other improprieties, possibly year after year.

 

[Gasgas]

When I asked my accountant if I could purchase my Cali on the business and get the vat back by using it through the summer months for exhibitions and county shows etc ,he said I could not ,but I could charge it back to the company for specific usage at the going rate of hire ,and that some actual photo's of me and the Cali at these exhibitions would be a good idea.we decided not to go that route as the bik would out way the chargeback to the company

 

[Geezso]

To claim vat, you must charge vat. Total pain in the rear. You cant have it both ways.
If you sell it on you need to pay the tax man on that too.
Real ache imho

 

[GrannyJen]

It's a minefield.

VAT registration is easy to do these days but it is one of those things that I avoid like a plague, The business that owns the vehicle will be charging VAT on everything else, running input and output tax accounts, risking fines for being even a few hours late on the returns and for something so dubious as qualifying a California for business purposes at risk of HMRC disallowing it forcing you to appeal.

Not worth the headache especially as said above, when it comes to selling and having to watch the tax-person claw most of it back with you having to charge the buyer.

 

[Guffer22]

I thought long and hard about claiming the vat back through my business but as previously stated i had no wish to antagonise the vat man/ woman. The clincher was also the main reason we buy them over other similar vehicles i.e. the high resale value as you only save the vat on the purchase/ sale differential which is hopeful very little.

 

[Richard Teale]

If your business is VAT registered, then your business can claim some or all of the VAT that it pays for a vehicle. The proportion of VAT your business claims back must reflect any personal use; so if you use the vehicle for non-business purposes for 50% of the time then your business can reclaim 50% of the VAT.

Another important consideration is 'benefit in kind'. If you buy a vehicle through your business, then your business owns the vehicle. If you then use the vehicle for non-business purposes then HMRC will regard this as a benefit in kind and you will attract a tax liability.

If you are running a rental business then reclaiming some or all of the of the VAT is something that your business can do (although agree with @GrannyJen, there are many costs associated with being VAT registered and its a hassle unless your turnover makes it worthwhile). Do not however enter into this lightly though if you intend to use the vehicle for regular non-business related purposes. The old adage that there is no such thing as a free lunch usually holds true and what HMRC giveth with one hand will usually take away with the other!

 

[Calijuja]

I think you'll find if you live outside of the UK and are purchasing the vehicle in the UK and exporting it within the year, you can claim the VAT back. This is often deducted at point of purchase through a dealer. If you are selling a new vehicle (look up the definition of new as per VAT refunds; it's like under 6000KMS) you can claim back some of the VAT you paid from what I understand. Am certain re former but latter is my understanding so worth checking it out.