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Under HMRC what can be claimed as a commercial vehicle and can input tax be claimed? - Crowther Image

Under HMRC what can be claimed as a commercial vehicle and can input tax be claimed?

Is it important to establish when buying a vehicle for a business whether it will be treated as a car or a commercial vehicle. VAT cannot be claimed on cars, but it can be claimed for commercial vehicles if the sales invoice shows VAT and was purchased through a VAT registered company/individual.

Capital allowances can also be claimed on commercial vehicles, as these will be classed as Plant and Machinery, this is an allowable deduction against profit.

Many pick-ups are treated as commercial vehicles which can make them a more appealing company car option.

Car or commercial vehicle?

The basic definition of a car is:

  • A vehicle for use on public roads
  • With three or more wheels
  • Solely and mainly for the carriage of passengers
  • Rear of the driver’s has a roofed accommodation fitted with side windows, or constructed or adapted for the fitting of side windows

Commercial vehicle:

  • Constructed to carry a payload of one tonne or more
  • If the unladen kerbside weight is three tonnes or more this excludes it from the definition of a car

Claiming input tax on the purchase of a vehicle:

Input tax can be claimed for vehicles used primarily as a taxi, driving instruction car or self-drive hire car.

Or for a vehicle that will be used exclusively for business purposes and not available for private use to anyone. This places a high burden of proof and the owner must ensure that even in an emergency the vehicle cannot be used for personal use.

Benefit in Kind

Vans are charged on a flat rate of £3,350 and the fuel benefit linked to a van is also at a flat rate of £633 in 2018/19. Whereas with a car the benefit in kind charged is linked to the car’s list price and the amount of Co2 emissions.


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