Q. Can I reclaim VAT on the purchase of a new car for my business?
A. You may be able to reclaim all the VAT on a new car if you use it only for business. However, the car must not be available for private use, and you must be able to show HMRC that this is the case. 'Private use' includes travelling between home and work, unless it's a temporary place of work.
You may also be able to claim all the VAT on a new car if it's mainly used:
- as a taxi
- for driving instruction
- for self-drive hire
If you lease a car, you can usually claim 50% of the VAT. You may be able to reclaim all the VAT if the car is used only for business and is not available for private use, or is mainly used as a taxi or for driving instruction.
You can usually reclaim the VAT for buying a commercial vehicle (like a van, lorry or tractor) if you only use it for business.