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A company director has purchased a prestigious new car as a means to impress potential customers and secure new business. He has reclaimed the VAT on the basis that, because his home is the business base, there is no personal use of the vehicle
I act on behalf of a limited company and its director. A year or so ago the director wanted to purchase a new car saying that he required something which was reasonably expensive and prestigious because he wished to impress potential new business clients.
Eventually it was decided that the new vehicle should be purchased by the company rather than personally and a BMW saloon was bought for £35 000.
I have only recently learned that the company has claimed back the input VAT on this purchase. I was a little aghast at this because I am sure that this is incorrect. However when I took this up with the client he threw HMRC’s guidance at me and insists that because there is no private use this is OK.
The guidance (under “Reclaiming VAT when you buy a car”) says ...
