The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
This guidance note covers the VAT treatment of the purchase or lease of a motor car and provides an overview of when VAT can be recovered in respect of cars used for business purposes.
From a VAT perspective, a car is deemed to be a motor vehicle of any description that meets the following conditions:
capable of being driven on public roads
has three or more wheels
is constructed or adapted to mainly carrying passengers
has to the rear of the driver’s seat roofed accommodation which is fitted with side windows or is adapted and capable of having side windows fitted
SI 1992/3222, Articles 2, 7; VIT50000; HMRC Notice 700/64; De Voil Indirect Tax Service V1.293, V3.443; 2006/112/EC, Article 176
The following are not treated as cars for the purposes of these provisions:
vehicles that can only accommodate one person
vehicles that are suitable for carrying more than 12 people including the driver and which meet the requirements of Road Vehicles (Construction of Use) Regulations 1986, Sch 6 (road safety regulations)
vehicles of not less than three tonnes (unladen weight) as defined in Road Vehicles (Construction of Use) Regulations 1986
vehicles constructed to carry a ‘payload’ of one tonne or more. ‘Payload’ is the difference between a vehicle’s kerb weight and its maximum gross weight, both terms as defined in Road Vehicles (Construction of Use) Regulations 1986. This change means that certain dual purpose vehicles, commonly called twin cab or double cab pick-ups, are no longer cars for VAT purposes. A few double cabs carry a payload of under one tonne. Customs Centre of Operational Expertise for the Motor Trade (COPE) maintains a schedule of double cab pick-up vehicles and their ex-works payloads. Agreement has been reached with the Society of Motor Manufacturers and Traders about the treatment of optional accessories which dealers or others may add to a double cab potentially converting it into a
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