Get VAT Back on Cars
Getting a better tax deal on your business motoring
There are three ways to consider getting a tax deduction in connection with business motoring, most people will only do two and miss our on valuable savings.
The well known are;
1. Having a company car, where you pay tax based on CO2 emissions plus list price.
2. Where the driver bears the cost of their own motoring and claims 45 pence per mile for the first 10,000 miles and 25 pence thereafter.
The lesser know route is the “third way” where you are able to claim all of the motoring costs over the lifetime of ownership and pay tax on the private mileage proportion.
The third way works particularly well for vehicles which have a new cost of over £30,000 and where there is more than 50% business motoring. If you have a more expensive vehicle or your business motoring is significantly in excess of 50%, which is often the case, you will find that the third way provides significant savings.
Getting the VAT back
It is also worth looking at whether is feesable for you to claim the VAT back in connection with the purchase of new vehicles. The savings can be considerable, especially when purchasing multiple vehicles.
For example, if your total collective vehicle purchase cost is £120,00 you could potentially recover £20,000 through VAT, these kinds of savings are very significant.
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