Business car lease VAT Fuel Allowance

silkened

I am a sole trader and am looking at the possibilty of getting a business car lease. The car will mainly be used for business but some personal use also.

Can I purchase the lease through the business and claim VAT back on the full purchase?

Would I still be able to claim the 40 /25 ppm fuel allowance?

any advice is appriciated....

JasonLVC

A lease car, leased via your 'sole trader' entity should enable you to reclaim 50% of the VAT relating to the vehicle lease and 100% of the VAT relating to service/maintenance. Most leases for fully maintained leases split the costs between lease and servicing. If just a lease, 50% of the VAT and then any tyres you buy from Kwik Fit or Dealer servicing can be 100% reclaim of the VAT.

That is on the basis you are a fully taxable business (that is, everything you sell is standard or zero rated, ie, your' not selling insurance or education, etc).

You can also still reclaim the 40p per mile allowance but you should keep receipts so that the business can reclaim a proportion of the VAT on your fuel costs as input tax (google "VAT Advisory Fuel Rates, HMRC") for more info.