VAT on Commercial Vehicles

[Paulb2]

I have recently purchased some commercial vehicles on which VAT is charged. I have taken out finance agreements to pay for these over three years by monthly payments. Do I deduct the input VAT on the purchase date or spread the total over 3 years. I would be grateful for any advice.

[CTAstudent]

You can recover the VAT all in one go, It will be the tax point date of the invoice as per normal. The HP terms are not taken into consideration.

[vatexpert]

The VAT treatment depends on the terms of the financing. If you are buying the vehicles on hire purchase, that is a supply of goods and you would be able to recover the VAT up front under the normal tax point rules. However, if you have entered into a leasing arrangement with the bank or finance company, VAT can be deducted only on the monthly payments.

Joe Wilkins
www.vatexpert.net

[Paulb2]

Thank you both very much. That's very helpful.