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There have been so many arguments over the years about VAT on company cars that you are probably aware of the rule - if the car is available for private use, you can't claim the VAT back on the purchase, even if you never actually use it privately. This seems an unfair and illogical rule, because business use surely ought to enjoy a deduction of some amount, but Customs are fond of it and they will defend it vigorously through the courts. The most celebrated case was about Mr Upton's Lamborghini, which he claimed was only ever used to deliver cigarettes to pubs and clubs. There were various good business reasons for using a Lamborghini rather than a white van. The chairman of the Appeal Tribunal thought that this was such a good story that he deserved the VAT, but sadly the Court of Appeal supported Customs' view of the law. He could use it for private motoring, even though no-one suggested that he actually did so, and that was enough to deny any VAT. He is probably still wondering why he lost. Now a new case has given Customs something to think about. A company director lived only a short distance from the office, so he didn't need to drive his company car home. He only used it for business purposes, and the other directors passed a resolution forbidding any private use. Customs argued that it was still physically available, but he claimed that it was not legally available - the board resolution showed that his employer did not intend the car to be available for anything other than business. The Appeal Tribunal agreed with the taxpayer. The only trouble with this is that it might force Customs to take a harder line. Usually, they simply accept that the car is not used privately - they will deny the VAT because it's available. So they don't have to send spies round to see if you are doing the shopping in it. If you want to rely on the board resolution idea - and if Customs fail to overturn it by appealing to a higher court - then the board resolution will have to be a real one, and you will have to obey it. But this is a rare success for the traders in this long-running battle. The case was heard by the VAT Tribunal earlier this year and can be viewed on the Tax Tribunals' website under the reference V18,592 Elm Milk Ltd.