Personal VAT claim for 50% Car Lease VAT

Forum Categories GENERAL VAT DISCUSSIONS Personal VAT claim for 50% Car Lease VAT

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  • #55781

    Hi All,

    Looking for some advice (HMRC are taxing months between messages)
    “If you lease a car, you can usually claim 50% of the VAT
    according to the above, you can claim 50% of the VAT back for a Leased car if its used for Business use,

    How do you go about making that claim to HMRC.
    When you run through the Claim Tax Relief Expenses Wizard on Gov.UK it asks if its a car leased by yourself, then says you can’t make a claim.


    Trevor S

    I think that you may be confusing taxes?

    The VAT on leased cars is recoverable by VAT registered businesses on their VAT return, in the same way that they recover the VAT incurred on their other business expenditure.  The only difference is that recovery is restricted to 50% of the VAT charged, this is because of the possibility that the car may also be put to private use.  Any business that is not VAT registered is unable to recover any of the VAT incurred on their business expenditure.  More detail regarding the VAT treatment of cars is here:

    You haven’t provided a link to this “Claim Tax Relief Expenses Wizard”, but that type of wording normally applies to income or corporation tax, on salaries or business’ profits – not VAT.  For example, if this is the page that you’re looking at, it calculates what income tax relief an employee might be entitled to if they incur certain types of expenses as part of their employment, which aren’t reimbursed by their employer.


    Hiya, thanks so much for your reply,

    So, if i personally lease a car for business use, i’m not able to claim tax relief, is that right.

    In theory, i then pay full Tax and Vat both on the same thing for something that’s business use (Taxed via wage and VAT on the lease)
    But if i was to buy a monitor for use at home for work purposes, i can claim tax relief on the VAT? (both are objects required to perform my role)


    Trevor S

    You do need to consider the different taxes individually.


    You’re not entitled to reclaim from HMRC through the VAT system any of the VAT you’re charged on goods that you buy personally, regardless of what use you then put them to.

    VAT on expenditure can only be reclaimed by VAT registered businesses, and only when they have been charged it by their suppliers and the purchase is to be used by them in making taxable supplies (which essentially means generating income which itself is subject to VAT).

    Employment Taxes (Income Tax / National Insurance)

    This is not my current area of knowledge, I’ve not been involved with employment taxes since 2014. So you may be better with an income tax forum! I’m aware of this one and I’m sure there must be others!

    But I know that employees are entitled to reclaim income tax relief in respect of some purchases they may make for use in their employment, provided that those costs are not reimbursed as expenses by their employer. This tax relief is what is covered by the form in your original post. It’s likely that any values you’re asked for on this form should be the VAT inclusive amounts, as that is the cost that you’ve incurred.

    I’m sure you can’t reclaim the actual cost of a car in this way. In virtually all circumstances HMRC consider cars to have an element of, or potential for, private use – even when they’re owned by businesses. However, HMRC do allow tax relief on 45p per mile when an employee uses their own car for what HMRC regard as business use. There are some complex rules on what counts as business use, for example journeys from home to a normal workplace are excluded. If you’re not paid a mileage allowance by your employer (or are paid at a rate of less than 45p per mile), you are probably entitled to tax relief on the 45p per mile (or the difference between that and whatever your employer does pay).

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