Business Contract Hire VAT query

geeba88

Hi

I'm clocking up alot of business miles and was looking at taking out a PCH. I'm the director of VAT registered limited company, so I believe I can reclaim 50% of the VAT on a lease of this nature.

My query is, to go down this route, do I need to be registered with HMRC as a company car driver? At present I own my car privately and reclaim business mileage.

Thanks in advance

ps - I realise that my accountant should advise me on this, however he's on holiday for two weeks!

emmell

You will have to pay tax on the company car, it is a benefit in kind.
ML.

ilovebanksMCMLXXXI

It would need to be on Business Contract Hire to reclaim the VAT; if you take out PCH the only thing you will be able to do is claim business mileage as the contract is personal and not through the business.

You don't need to register as the contract payments will show as a cost to the business.

You as the director (i.e. an employee of the Limited company) would need to pay BIN (Benefit in Kind) on the car from your salary

All the best