Vat on company vehicle

Discussion in 'Askaboutbusiness' started by Gal1, Jan 4, 2007.

  1. Gal1

    Gal1 Registered User

    I have a couple of questions someone maybe able to answer for me..
    Can you tell me if you can claim the Vat back on a company vehicle
    1. If it is a leased vehicle
    2. If you have to own the vehicle outright.
    My husband is thiinking of setting up a courier business and is wondering
    which is the best option, to lease a vehicle or buy one that he will own.
    For tax reasons, which is the best option.
    Also, can you claim the vat back on the diesel.
    How soon would he need to register for tax, as he has been employee of a company up to now.
    I had a look on the REVENUE.IE website but could not see any information on this.
    Any advice would be much appreciated.
  2. beb28

    beb28 Registered User

    Hi Gal1,
    VAT can be claimed back on a company vehicle only if it is a commercial vehicle. It can be claimed on such a vehicle regardless of whether or not it is purchased outright or leased. Main difference being that if it is purchased (or hire purchased), then an input VAT credit will be received straight away for the whole VAT amount. If it is leased, then a smaller VAT input credit will be received with each payment made (prob monthly).
    N.B. The vehicle should be purchased AFTER registering for VAT in order to get credits.
    In relation to corporation tax, for a purchased/hire purchased asset - capital allowances are received. For leased assets, the capital amount of the repayments is given as an allowance.
    Hope this helps
  3. mirmick

    mirmick Frequent Poster

    [Also, can you claim the vat back on the diesel.

    Yes, you can claim VAT on diesel.
  4. mc79

    mc79 Registered User

    you can claim the vat back on diseal, and only can claim it back on vans for commerial use... i dont think you can claim it back on cars..... maybe some one can answer this,
    Also this website might be able to help you
  5. ACA

    ACA Frequent Poster

    Had the very same question asked of me today when closing a claim for a vat registered company!! Aren't you lucky!;)

    VAT can be deducted from the retail price, (or reclaimed at a later date) of a vehicle that is solely commercial - van, truck, lorry etc. It cannot be recovered from a car because a car is considered a perk as it can be used for other things.
  6. Kiddo

    Kiddo Frequent Poster

    As mentioned already, you can only claim vat back on a commercial vehicle.

    You can claim vat back on all diesel.
  7. Romien

    Romien Guest

    What about petrol? Can the VAT be claimed back on petrol and can some petrol and diesel be mixed as expenses?
  8. diceyreilly

    diceyreilly Registered User

    I contacted vat office and advised that i was starting a business as a sole treader and needed to buy a commercial vehicle to supply serviceand registering for vat.I was asked was there a trade in which i confirmed was my own private vehicle and was told that because i was replacing my private vehicle with this commercial that i would not be entitled to the full vat return(% for business use and % for private use..This would also effect the diesel vat claim and other allowances to the same percentage.
    when i said we had a second private vehicle for personal use i was told "so do most people".
    this was a great encouragement to start up a small business and effectively invest my private vehicle into it.
    did i just get someone on a bd day or has anyone been subjected to this type of investigation.
  9. sparkey

    sparkey Frequent Poster

    Dont worry about it
    Just split the transaction into 2 :
    (a) diceyreilly ( private person ) sells private car
    (B) diceyreilly sole trader buy's new van.

    The only paperwork to go into your company accounts is transaction 2
    therefore full vat can be reclaimed on van and full vat on all diesel

    Dont show sale of private vehicle in accounts at this transaction has nothing to do with company .
  10. diceyreilly

    diceyreilly Registered User

    Thanks Mirmick couldnt locat a/c so you have cleared matter up.
  11. diceyreilly

    diceyreilly Registered User

  12. diceyreilly

    diceyreilly Registered User

    Sorry Sparkey mistook your id Thanks anyway

    CHABLIS New Member

    I am registered for vat. On a trade-in of a commercial vehicle, dealer only details vat on the full amount of value of new van sold. Amount allowed on trade-in is not broken-down between vat and net. I assume however I need to calculate vat on allowed amount say (123/100*.23) and pay to Revenue, as I claimed vat on the purchase of the van when I acquired it?
  14. vandriver

    vandriver Frequent Poster

    Let's say you bought a van for 12,300 and traded in one for 6,150.
    I would record a capital purchase of 10k +vat and reclaim 2,300 but also record a capital sale of 5k + vat and pay 1,150 (the net effect would be a refund of 1,150)

    CHABLIS New Member

    Yeah what I was thinking, thanks.
  16. missthrifty

    missthrifty Frequent Poster

    Last edited: Jan 4, 2017
    Problem solved
    Last edited: Jan 4, 2017