Personal Contract Hire - Used for Business - Reclaiming VAT

[FordMan1]

All,

I took out a personal lease in February 2014 for a two year term.

The deal is a PCH so no balloon payment or option to purchase at the far end.

The car is used for work and any mileage covered is reclaimed through standard employer procedures at the rate of 14ppm.

I believe I am correct in saying that I can then claim half the vat back on the difference in level between the 14ppm offered and the HMRC rate of 45ppm.

There are conflicting theories in the office as to what one can and cannot claim when they have a personal contract hire car utilised for business purposes.

Ideally I am looking to establish a full list of everything that can be reclaimed and how to go about doing so without incurring the exorbitant costs of an accountant.

For the avoidance of doubt, I receive a car allowance and I also use the car for personal purposes.

A one stop thread to answer these points would be great and I couldn't seem to find much on here to assist.

Thanks in advance.

I took out a personal lease in February 2014 for a two year term.

The deal is a PCH so no baloon payment or option to purchase at the far end.

The car is used for work and any mileage covered is reclaimed through standard employer procedures at the rate of 14ppm.

I believe I am correct in saying that I can then claim half the vat back on the difference in level between the 14ppm offered and the HMRC rate of 45ppm.

There are conflicting theories in the office as to what one can and cannot claim when they have a personal contract hire car utilised for business purposes.

Ideally I am looking to establish a full list of everything that can be reclaimed and how to go about doing so without incurring the exorbitant costs of an accountant.

For the avoidance of doubt, I receive a car allowance and I also use the car for personal purposes.

A one stop thread to answer these points would be great and I couldn't seem to find much on here to assist.

Thanks in advance.

[FordMan1]

Sorry guys, I should have clarified, I am merely an employee at a large firm and not self employed.

[FordMan1]

CRB14 said:

You can claim the tax relief on the difference between 45p/mile (first 10,000 business miles) and the 14p/mile that you get paid. You'll have to do this in your end of year self assessment. If you don't do one yet you'll need to. Some companies send off the details for you though. Be mindful that the mileage rates only apply to business miles and can't be claimed against any locations that you are expected to be at for 2 years or more (as this then becomes your permanent place of work).

In terms if VAT...no, afraid not.

Thanks for that, much appreciated.

From speaking to some of the senior guys, they inferred that they were in a position where they claimed tax relief on monthly cost of the car and also any VAT on any maintenance of the vehicle, whether taken as part of the package of the lease or as stand-alone purchases such as tyres, etc.

It shouldn't be confusing and in reality it probably isn't, however, various colleagues seem to do it differently!