HP Agreements

[Gianni]

Hi all

The company I work for has just purchased a car under a HP Agreement. Now I'm OK with all the entries including the ongoing finance/capital cost split (used the actuarial method). However I'm a little stuck on the VAT implications. I've searched the forum but couldn't find an answer.

Am I able to claim the full VAT? The car has been purchased for £35040.42 with the vat element being £5180.81. It's just I know with a finance lease you can generally claim 50% of the ongoing repayments and I'm sure the rules for cars are different!

Any help is appreciated.

Cheers

[Jan]

You cannot claim VAT back on a car, even if it is for full business use, only vans.
Incidently, are you sure the figures you gave are correct? VAT on £35042.42 would be £5219.08.

[Gianni]

Hi Jan,

Thanks for your reply. The VAT figure is correct, it includes the car tax + registration fee.

Cheers

[Jan]

So you have split car tax (RFL) from cost of car? :001_smile:

[red_devil]

You cannot claim VAT back on a car, even if it is for full business use, only vans.
Incidently, are you sure the figures you gave are correct? VAT on £35042.42 would be £5219.08.

Don't forget Jan that you could claim back the input VAT if the car was a genuine pool car for 100% business use and which was only taken off the premises for business journies. Easy to overlook this I know!

[Jan]

:blushing: Actually I didn't know that :blushing:

Are you saying that if say a car was kept on business premises and was only used by various members of staff on business, VAT could be reclaimed? When did that come in - must have missed it.

[Bluewednesday]

Don't forget Jan that you could claim back the input VAT if the car was a genuine pool car for 100% business use and which was only taken off the premises for business journies. Easy to overlook this I know!

We had a case like this but still couldn't reclaim VAT as the vehicle was not a 'qualifying vehicle'. Essentially they weren't charged VAT so could not reclaim it