A new VAT Notice 700/64 on motoring expenses has been issued by HMRC this week (cancelling the previous July/12 edition). Taxpayers should remember that a car has to be used exclusively for business purposes before input tax can be claimed back. Even then it must not be available for private use. Regardless of intention or actual use a taxpayer needs to take active steps to prevent a car being available for private use. Examples of these might be might be business-only insurance and keeping the keys with the car only at business premises.
Eamon McNicholas
Tax Barrister, Accountant
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