Question on VAT on Car Repairs

blue_monkey_2

I have found this one the HMRC Website:

Reclaiming VAT on repairs and maintenance

You can reclaim all the VAT you're charged on repairs and maintenance to a vehicle so long as:

• the vehicle is used to some extent for business purposes
• the business pays for the work to be done

It doesn't matter if the car is used for private motoring or if you've decided not to reclaim the VAT on road fuel for business travel.
But you can't reclaim the VAT on vehicle repairs and maintenance if you use the vehicle only for your own private motoring.


http://www.hmrc.gov.uk/vat/managing/reclaiming/motoring.htm#1


Does this mean that if 'the business' (I am self emplyed) pays for new tyres on my car - which I use for going to the PO and to get stock/visiting clients - I can reclaim all the VAT on them and put them through the business?

Seems weird that I can claim ALL maintenaince, it doesn't really require any as it's new but I thought it was a weird rule that could be exploited, that's all, so wanted to ask.

Thank you as always

chalkie99

Are you VAT registered?

blue_monkey_2

chalkie99 wrote: »

Are you VAT registered?

Yes. I've never claimed anything for car use. I only found the info as I am looking to buy a car specifically for using for work.

Just seems that it would be open to abuse. I could do 10 miles a week and get the car fixed with business money from what that is saying.

I was just surprised by the wording of it.

JasonLVC

blue_monkey wrote: »

Yes. I've never claimed anything for car use. I only found the info as I am looking to buy a car specifically for using for work.

Just seems that it would be open to abuse. I could do 10 miles a week and get the car fixed with business money from what that is saying.

I was just surprised by the wording of it.

HMRC acknowledge that cars are used for both business and personal use, strictly speaking when you have an asset that is used for both personal/business use, you should apportion the VAT recovery between personal/business use but this is impossible to do for a car and so HMRC take a fairly pragmatic view on it.

So, yes, if the business owns a car and incurs costs repairing it, then the business can reclaim the VAT on servicing, repairs, tyres, etc.

You can also reclaim the VAT on fuel used in the vehicle although there is a restriction here, look up "road fuel scale charges" for more information.

If you are looking to buy a car, you are strctly not allowed to reclaim input tax on the actual car purchase. So don't get confused between repairing a car and buying a car - the VAT treatment is different.

Don't forget, for your current car, you can go back 4 years from a current date and reclaim previously 'missed' input tax on repairs/tyres, etc so you've not lost out.