Reclaiming VAT on Cars and Motoring Expenses. The 50/50 rule. It's rare to reclaim VAT on PCP agreements because leasing is more tax efficient if you are eligible. Check what VAT is due when buying or selling a car in the EU or when buying a car outside the EU for import to the EU. These are the three main categories: The rules are different if you're buying a pick-up truck. As a used car dealer myself, my accountant sent me this example earlier: You buy a car for 7000 today in GB and sell it in Ni for £8000 tomorrow – you pay vat on the margin of £1000 which is £166.66 On 1 /1/21 you buy a car for £7000 in GB and sell it in N Ireland on 2/1/21 for £8000 then HMRC will be looking vat of £1333.33. Over 4 months, she drives the car for 7 000 km. You must take this up first with the seller or, as a second step, with the tax authorities in the country where you have bought the car. VAT should be charged on the total price of the car - this includes any accessories or associated costs, such as delivery charges. As a private seller, you don't have to charge VAT when you sell your car. You can request us to disclose the amount of any commission received from a lender. Cookies help us deliver our services. VAT is charged when a private customer buys the car. On 20 January 2021, the Court of Justice of the European Union (CJEU) gave its ruling in a case that raised the question of whether the provision of a company car to an employee is subject to VAT (C-288/19, QM v Finanzamt Saarbrücken). This benefits consumers as it makes used cars more affordable, as the amount of VAT they pay is far smaller compared to the 20% they would pay for a new vehicle. There's also a form that must be filled in before you buy an adapted vehicle because VAT cannot be reclaimed after you have bought one. VAT should be charged on the total price of the car - this includes any accessories or associated costs, such as delivery costs. A car that will mostly be used for driving lessons, as a taxi or as a hire car. This is known as the second-hand margin scheme, used by most car dealers. If you bring back to your country on a permanent basis a new car that: You have bought in an EU country other than your own. As a private seller, you don't have to charge VAT on the sale. It centres on the VAT Margin Scheme for cars that are moved between Great Britain and Northern Ireland. So the £18,000 cost of a mid-range Vauxhall Astra includes £3,000 of VAT, which goes to the government. VAT expert Glyn Edwards, from MHA MacIntyre Hudson, told AM: “The NFDA is pursuing possible solutions, but it’s not an issue that is simply going to go away. 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Mario lives in Italy and decides to buy a new car in Germany. As the car is new, VAT should be paid in Italy, where Mario wants to register it. To illustrate, the purchase price of a VAT qualifying car which is advertised for £36,000 drops to £30,000 as the £6,000 is reclaimable from HMRC on export from the EU. of copyright. The tax will be lower because it's charged on the price after discount, plus the on-road and delivery costs mentioned above. It is very difficult to reclaim input VAT on the purchase cost of a car. This tax-treatment - along with the company car tax benefits that apply to double-cab pick-up trucks - has helped to boost the popularity of pick-up trucks as company vehicles, which are also used as family cars. If you hire a car to replace a company car that’s off the road, you can usually claim 50% of the VAT on the hire charge. Paid in Italy, where Mario wants to register it 3 200 to! Due on the total price of a car was not “ wholly exclusively... 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