Summer 2006 Newsletter


Brave New World

Business Not Pleasure

Summertime Blues

All That Glitters...

Casting The Net

Trust Gordon?

It Ain't Over...

One In The Eye

Keep Your Nose Clean

Foreign Affairs

When Is A Car...

Don't Walk Away

Avoiding, The Issue

Brown Is Anti-PC

VAT's Up Doc?

Fuel's Gold

An Age-old Question?

That's Unfair!

Year In Year Out

How Hard To Try?

It's A Rip-Off!

Outlaws Win

Show Some Restraint

Not Our Problem

They Cannot Be Serious?


Pension Disappointments

Business Not Pleasure

HMRC don't like anyone claiming VAT back on a car. The law is tough: you can't claim any VAT unless you intend to use the car 100% for business purposes - and that isn't accepted if you intend to make the car available to anyone for private use. Traders and judges have struggled with what that means - if you intend to use the car 100% for business, how can it be available for private use? But it seems the mere possibility of someone using it privately is enough to rule out a VAT claim.

A company has succeeded up to the Court of Appeal by arguing that it ruled out private use with a board resolution. The managing director would be breaking the conditions of his employment if he used his car for anything other than business. HMRC argued that it was still physically possible for him to do the shopping in it, but the judges reckoned that there was a clear intention not to make it available for that.

This is a good win for the taxpayer, but don't rush out and copy them. There are important limits. The judges said only a company could put such a legal barrier in the way of private use - a proprietor of an unincorporated business could not show that a car was not available for their own use. And if HMRC finally give up this case as lost, they may start taking the harder line in future - instead of relying on the mere possibility, they might start trying to prove actual private use. It would be embarrassing to turn up in the Tribunal arguing that the car wasn't even available, and finding Customs there with photographs of you doing the school run in it.

If you think that you might be able to claim the VAT back on a car under this new ruling, we will be happy to advise you.