Claiming VAT back on company car used for marketing our products

[alitech]

Hi all

I have purchased a company car and I am going to use it to market our products, we sell car accessories online and the car is going to be used as a promotion tool in trade shows and generally driving everywhere advertising our business and our products within the UK. We also sell outside of the UK and ship worldwide. We need more UK business and for this reason, the car we bought will have most of our accessories on it along with big emblems and stickers with the business logo and name on there.

Its a Tesla. There is some conflicting information about claiming vat on the car and I cant seem to get a straight answer on this. My accountant says I need to make the decision about claiming VAT or not. The car is for advertising as well as personal use. We plan to use the car mostly for personal use Any trip we make in the car is going to advertise the business regardless of it being personal use or business use. Can just driving it around not be classed as business use? If we are driving it anywhere, we are promoting our business so the fact is that anywhere it goes, it is potentially a business trip, even though we are going about doing a lot of personal stuff in the car.

My accountant says we could also consider claiming 50% vat back on the car also, but again, I am not clear if we may get pulled up by HMRC for even that amount of money. I just need some clarity over this and would like some opinions and advice on which way I should go.

The VAT is a lot, its about £12k so it is substantial but I want to get it right.

Thank you

 

[WaveJumper]

You head this up as you bought a company car but then add the car is going to be mostly used for private use I think you need to go back to your accountant and get some clear advice on not just the VAT but the tax implications to you personally

 

[lesvatadvice]

The VAT rules in relation to claiming input tax on a car are very strict. Not only must it not be used for private purposes, but it must not be available for private use. For example, if you have business only insurance, or a, employment contract that prohibits private use.

The 50% rule only applies to a leased car, not a car purchased.

It may be possible to structure the purchase to allow you to claim the VAT, but HMRC may challenge the claim in any case.

 

[UK Contractor Accountant]

As above company can't claim back VAT back where there is more than minimal private use e.g detour to a shop whilst on a business journey.

Will also be taxed on car benefit based on the private usage you mention. Just because it sign written etc doesn't make all journeys business journeys.

 

[Shaunio]

Hello, I am in a similar position also. My business hosts car driving tours and we are due to purchase a new car that will genuinely be used as a full time marketing vehicle. It will be fully branded up and be used to run the car tours, taken to car shows and and various marketing photo-shoots etc. The branding will be very distinctive and the car will be photographed frequently by members of the public. We do not currently have business premises as our business can currently be carried out working from home (like many businesses these days). We plan to have a tracker fitted to the vehicle and log ALL journeys made. No private use of the vehicle will be allowed. Does anyone have any experience of similar situations?

 

[alitech]

Thanks everyone for your valuable comments. I will steer clear of claiming vat.

 

[Chart Accountancy]

You can only claim the VAT back if you purchased a commercial vehicle with insignificant personal use.

Unfortunately, for the purchase of the Tesla, you cannot claim the VAT back.

If this was a lease, then it might have been possible to claim 50% of the VAT back.

 

[Sparetoolparts]

Hello, I am in a similar position also. My business hosts car driving tours and we are due to purchase a new car that will genuinely be used as a full time marketing vehicle. It will be fully branded up and be used to run the car tours, taken to car shows and and various marketing photo-shoots etc. The branding will be very distinctive and the car will be photographed frequently by members of the public. We do not currently have business premises as our business can currently be carried out working from home (like many businesses these days). We plan to have a tracker fitted to the vehicle and log ALL journeys made. No private use of the vehicle will be allowed. Does anyone have any experience of similar situations?

just following up on this how did it pan out with you in the end?