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Rare cars

26 October 2016 / Neil Warren
Issue: 4573 / Categories: Comment & Analysis

The position on VAT input tax claims for new cars following three recent First-tier Tribunal decisions.


  • A glimmer of hope for VAT claims on motor vehicles?
  • Two conditions in The Value Added Tax (Input Tax) Order 1992 Art 7 must be satisfied.
  • Employment contracts must reflect commercial reality.
  • Is the vehicle is insured for business purposes only.
  • Is there an enforceable legal restriction on private use.

Going back to my Customs and Excise days in the 1980s I had a simple approach to deal with input tax claims on new cars: ‘If you are a taxi driver car hire business or driving school or if you are buying the car for resale you can claim it back. You can also reclaim input tax if it is a genuine pool car but you will have a big...

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