VAT on fuel for rental van & VAT on dual use vehicle

andyuk2005
andyuk2005 Posts: 137 Forumite
Name Dropper First Post First Anniversary Combo Breaker
in Small biz MoneySaving
Hi all!

This is probably a commonly asked question, but for the life of me I can't a straight answer anywhere!

I have a VAT registered business. I often rent a van from a usual vehicle rental place. I use the vehicle purely for business, usually for only 2 or 3 days. Am I able to claim VAT back for the fuel I use in that vehicle?

Second question: I hope to purchase my own van in the future, as the renting is a bit of a pain! I'd use the van for both business and personal use. It will likely be a small van, with seats in the back which I can fold down to transport stuff. Probably about 50:50 business and personal use. I'm happy to keep logs/mileage records. Am I able to claim back any VAT on that vehicle if I provide detailed and accurate records etc?

Thanks very much for any helps folks!

Comments

  • UglyJoe
    UglyJoe Posts: 27 Forumite
    edited 9 April 2018 at 6:08PM
    andyuk2005 wrote: »
    Hi all!

    This is probably a commonly asked question, but for the life of me I can't a straight answer anywhere!

    I have a VAT registered business. I often rent a van from a usual vehicle rental place. I use the vehicle purely for business, usually for only 2 or 3 days. Am I able to claim VAT back for the fuel I use in that vehicle?

    Second question: I hope to purchase my own van in the future, as the renting is a bit of a pain! I'd use the van for both business and personal use. It will likely be a small van, with seats in the back which I can fold down to transport stuff. Probably about 50:50 business and personal use. I'm happy to keep logs/mileage records. Am I able to claim back any VAT on that vehicle if I provide detailed and accurate records etc?

    Thanks very much for any helps folks!

    Q1. - Yes - with a valid vat receipt.

    Q2. - ,Relating to the vehicle itself, I don't think so due to the personal use
    You can for fuel used for business purposes - supported by valid vat receipts.
  • andyuk2005
    andyuk2005 Posts: 137 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    A limited company.

    Thanks UglyJoe for the info! I don't suppose you know where it says clearly either on HMRC website or similar regarding the VAT back on business fuel?

    Many thanks for your help!
  • UglyJoe
    UglyJoe Posts: 27 Forumite
    https://www.gov.uk/reclaim-vat/cars :)
  • Savvy_Sue
    Savvy_Sue Posts: 46,021 Forumite
    Name Dropper First Post First Anniversary
    If ltd company, speak to your accountant. If you don't have one, this is precisely the kind of question where they can save you more money than they cost.
    Signature removed for peace of mind
  • andyuk2005
    andyuk2005 Posts: 137 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    Thanks UglyJoe for the link. I had visited that one before but initially thought it wasn't details enough. I suppose under the title 'Fuel Costs' it says 'You can reclaim all the VAT on fuel if your vehicle is used only for business.' is actually pretty self explanatory!

    It was actually my accountant who said that I couldn't claim the VAT back on the hire vehicle fuel, I think I'll go back to them and ask them to double check!

    Frustratingly it also means I'll be less confident in their answer regarding the dual purpose vehicle!
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    edited 10 April 2018 at 8:11PM
    andyuk2005 wrote: »
    A limited company.
    you ask specifically about a VAN therefore be very careful not to confuse the rules about cars with those about vans in the context of a Ltd Co. Pay particular attention to "car derived vans" since you refer to wanting fold down seats - they are not vans....

    guidance is published under VAT notices which your accountant should know inside out:

    https://www.gov.uk/government/publications/vat-notice-70064-motoring-expenses/vat-notice-70064-motoring-expenses

    sadly if your accountant is categorically saying you cannot recover VAT on a hire van then it may either be: a) miscommunication or b) time for a new accountant

    also see:
    https://www.gov.uk/hmrc-internal-manuals/vat-input-tax/vit50600

    https://www.gov.uk/hmrc-internal-manuals/vat-input-tax/vit51500

    https://www.gov.uk/hmrc-internal-manuals/vat-input-tax/vit50900

    https://bishopfleming.co.uk/is-it-a-car-is-it-a-van-or-is-it-a-car-derived-van-or-combi-van/

    be very careful with "Kombi" vans as there have been recent tax tribunal cases where VAT claims have been overturned.

    http://www.uhy-uk.com/resources-publications/tax-hub/tax-blog/landmark-decision-on-benefit-in-kind-treatment-of-vw-kombis/ Someone I deal with had to reply that they would be selling their brand new £45,000 cost VW when informed of that case as it would cost them near £6k per year in benefit in kind tax having purchased it through their company...
  • andyuk2005
    andyuk2005 Posts: 137 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    FYI I have confirmed with my accountant that VAT can be reclaimed if 100% of its use is for business. I think they were under the impression I used it for personal use too, which wasn't the case as the receipts corresponded to the rental vans I used the fuel for.

    Thanks for your help folks. I shall also update here regarding purchasing a van as 00ec25 has explained, its a very complicated process!

    Thanks folks!
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