Vat qualifying - vehicle - can someone explain...

[Phooey]

...in simple terms, how it works. I'm just curious as i seem to see more adverts lately with the term "VAT QUALIFYING". A sole trader (vat registered) surely cannot reclaim VAT on a *car*? Commercial vehicle - Yes! But on a car?

example advert - http://pistonheads.co.uk/sales/3323297.htm

quote - "The car is vat qualifying which means if you are vat registered the car will cost 46000 + the vat.this is ideal if you want to export it or you are registered for vat and can claim it back"

[Eric Mc]

There are some "cross over" vehicles which are really commercial vehicles but also useable as motor cars - mainly in the four wheel drive or pick-up ranges of manufacturers. They also attract better Capital Allowances.

[joreco]

VAT qualifying in simple terms is, the seller can account for the VAT part separately on sale price, which has the benefit for export, or a business that is VAT registered and feels they can claim back the VAT, this being due to the VAT part of the original purchase price when new, being accounted for, I.e. Claimed back, which then needs to be added on the sale price, when disposed of.
It's not over common for cars to have the VAT part claimed back, as it is for vans, trucks and plant etc, but leasing companies and the like will.

[Eric Mc]

VAT CAN be reclaimed on ordinary motor cars in extremely restricted circumstances. Most ordinary businesses don't use their motor cars in such a way that would allow Input VAT to be reclaimed on the purchase cost of the car.

[anonymous-user]

HMRC has some reasonable guidance published

http://www.hmrc.gov.uk/vat/managing/reclaiming/mot...

from which

Reclaiming VAT when you buy a car

Generally you can't reclaim the VAT when you buy, import, or in some other way acquire a car. But there are some exceptions to this. You can reclaim all of the VAT if you meet one of these conditions:
• The car will be used exclusively for business purposes and you can show that it's not available for private use by your employees or anyone else. For example, your employees' contract of employment excludes private use including travel from home to the place of work.
• You intend to use the car mainly as a taxi, a driving school car or a self-drive hire car.
• You're a car dealer and the car will be part of your 'stock in trade' that you intend to sell within the next 12 months.