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!

[David Griffiths]

There is no such thing as "registration as a company car driver"

If the lease is in the company name, the company can recover half of the VAT. You will be subject to the tax charge on the car as a benefit in kind

If the lease is in your name, then neither the company nor you can recover any VAT, and you will continue to claim mileage allowance as before