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Car - VAT car?

It's a frustrating fact that a VAT-registered business can get back VAT on most of its costs, but almost certainly not on the purchase of a car. The rule is a particularly harsh one, and Customs interpret it strictly: you can only claim all or nothing, and you can only claim at all if there is 100% business use of the car. That might seem achievable, but there's a further catch - not only must you intend to use the car 100% for business, you also have to not have the intention to make the car available for private use by anyone.

It's not obvious (except perhaps to Customs) what this means. If you intend to use a vehicle 100% for business purposes, it probably hasn't occurred to you whether it will be available to anyone for private use. But the courts have held that if it is available - if someone, such as the trader, could use it for private motoring - then it's assumed that you intended this, and you can't claim back any of the VAT.

It's clear from the cases that go to court that people claim on the "common sense" basis, and then get into trouble with Customs. If you really think you have a case for 100% use, you may succeed by showing that you have tried to make the car unavailable for private use - if it can be kept at business premises, or the terms of the insurance restrict the use, or there is something special about the vehicle which makes private use unlikely. But if it's an ordinary car parked outside the proprietor's house at night, the Tribunals generally agree with Customs.