This notice cancels and replaces Notice 700/64 (July 2012).
1.1 What is this notice about?
This notice explains—
— what a car is for VAT purposes
— the VAT treatment of motoring expenses incurred by your business
— what vehicles qualify and whether you can claim back all or some of the VAT charged (this is because the reclaiming of some input tax on motoring expenses is not allowed or “blocked”)
— when you must account for VAT
— how to work out your output tax
— the records you must keep and
— what you can and cannot treat as input tax.
There are some exceptions to these rules which are also listed.
1.2 Who should read it?
Anyone who is registered for VAT and is charged VAT on motoring expenses.
1.3 What law covers this notice?
The VAT (Input Tax) Order 1992 (SI 1992 No 3222) art 2 defines what a car is.
VATA 1994, ss 56 and 57 cover scale charges.
The VAT (Input Tax) (Reimbursement by Employers of Employees' Business Use of Road Fuel) Regulations 2005 (SI 2005/3290) deals with fuel supplied to the employer for use in the employer's business where it is delivered and paid for by his employee on his behalf and where the employee is reimbursed.
2 The VAT definition of a car
Main narrative treatment—V1.293, V3.242, V3.443, V3.538.
2.1 What is a car?
A car for VAT purposes is any motor vehicle of a kind normally used on public roads which has three or more wheels and either—