VAT recovery when leasing vehicles
The VAT treatment of motoring expenses is relevant to any business that incurs VAT on motor expenses.
We have covered below some important points to be aware of concerning the recovery of input tax (VAT) when leasing vehicles:
Leasing company recovering VAT on purchase of cars. A leasing company
Tax and duty on goods sent from abroad
There are special rules to help ensure that goods sent from abroad are taxed appropriately. The aim is to not disadvantage UK businesses supplying goods in the UK, for example, by having to compete with VAT free imports. This includes goods that are new or used and bought online, bought abroad and
VAT treatment of road fuel costs
There are four options for the VAT treatment of road fuel costs.
Treat all of the VAT as input tax because 100% is used for business purposes. This option only applies to fuel for cars used exclusively for business purposes, such as pool cars.
Treat all of the VAT as input tax and either apply
Transferring a VAT registration
The taxable turnover threshold that determines whether businesses should be registered for VAT is currently £85,000. The taxable turnover threshold that determines whether businesses can apply for deregistration is £83,000. The thresholds are currently frozen until 31 March 2026.
When there is a
Check a UK VAT number is valid
The check a UK VAT number service is available at: www.gov.uk/check-uk-vat-number.
This service allows users to check:
if a UK VAT registration number is valid; and
the name and address of the business the number is registered to.
The service also allows UK taxpayers to obtain a certificate
VAT Exempt services
A business that incurs expenditure on taxable and exempt business activities is partially exempt for VAT purposes.
This means that the business is required to make an apportionment between the activities using a ‘partial exemption method’ in order to calculate how much input tax is
Transfer of Business as a Going Concern
The transfer of a business as a going concern (TOGC) rules concern the VAT liability on the sale of a business. Normally the sale of the assets of a VAT registered or VAT registerable business will be subject to VAT at the appropriate rate.
Where the sale of a business includes assets and meets
Your tasks if a VAT-registered business
The taxable turnover threshold that determines whether businesses should be registered for VAT is currently £85,000. Businesses with turnover below this level can also apply for a voluntary VAT registration.
Businesses charge VAT on their sales. This is known as output VAT and the sales are
VAT on imported vehicles
The Notification of Vehicle Arrivals (NOVA) is an online notification system for vehicles entering the country for permanent use on UK roads.
You can use the service if you are:
a VAT-registered business that does not use the secure registration scheme;
not VAT-registered and you have imported
VAT guidance for overseas sellers
New simplified VAT guidance for overseas sellers has been published by HMRC. The guidance also includes a new translation into simplified Mandarin to help support Chinese retailers that sell goods online into the United Kingdom.
The guidance provides further information about the rules and