The car must not be available for private use and this must be stated in your employment contract. Remember travelling from home to your normal place of work is classed as private use.
Therefore, it is rare to reclaim the VAT. If you hire a car you can reclaim all the VAT as long as you hire it for less than 10 days, its used only for business and not available for private use. For business cars you can either reclaim the VAT on fuel for business trips and keep a detailed mileage record or reclaim all the VAT and pay the right fuel scale charge for your vehicle. These include:. Examples include:.
If a purchase is for both private and personal use you can only reclaim the business proportion of the VAT. The time limit is 4 years for goods you still have, or that were used to make other goods you still have and 6 months for services. Legally, you need to keep a record of any receipts to support your claim. These records must be kept for a minimum of 6 years.
For more information on reclaiming expenses visit www. VAT is a complex tax and there are lots of tricky areas. A famous example is the court case over whether a Jaffa Cake is a cake or a biscuit? There is no VAT on cakes. However, there is VAT on a chocolate biscuit as this is seen as a luxury item.
The taxman tried to challenge this claiming Jaffa Cakes were in fact a biscuit and therefore standard rate VAT should be applied. When you save your YouTube cookies choice below, Revenue will save a cookie on your device to remember your choice. This Revenue cookie is set as a session cookie and will be deleted once you close this browsing session. YouTube may set cookies directly according to YouTube's own cookies policy. If you are making taxable supplies of goods and services or qualifying activities , you can reclaim VAT.
You are not entitled to reclaim VAT used for making exempt supplies or for your non-business activities. If the costs relate to both taxable and other activities, you can reclaim the VAT used for your taxable supplies. If you are not registered for VAT, different rules apply.
You may reclaim the VAT charged on goods and services used for the purposes of your taxable supplies, including qualifying vehicles. You must have a valid VAT invoice or relevant Customs receipt to support your claim. Although, it can only be for the percentage of mileage that refers to business use.
For more on this see our section on how to reclaim VAT on fuel and business mileage. However, other business expenses around entertainment can be reclaimed, check out more on business entertainment expenses here.
It may take some time in order for your staff expenses to be processed and for your business to actually claim VAT. There may also be some waiting time in between when your VAT return has been submitted and when you receive your VAT refund. For effective VAT recovery , there are some helpful tips and frequently asked questions that are worth knowing to help make your reclaim as successful as possible. Accept additional cookies Reject additional cookies View cookies.
Hide this message. Home Money and tax VAT. Reclaiming VAT. What you can and cannot reclaim You can usually reclaim the VAT paid on goods and services purchased for use in your business. Examples Half of your mobile phone calls are private. Print entire guide. Brexit Check what you need to do.
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