VAT Reclaim on company motorcycles

[Jont]

IÂ’m planning on getting myself a new motorbike shortly. Whilst visiting local dealers, 2 have mention about reclaiming VAT though my company, when IÂ’ve asked further, they state that the rules are different for motorcycles compared top that of cars.

IÂ’ve asked my accountant and he has no idea what they are on about.

I though IÂ’d do a little more investigation before I dismiss the idea.

Any advice much appreciated.
Thanks.

[Eamon McNicholas]

Three points.

1) A VAT-registered business buying a normal car for commercial purposes often cannot reclaim the input VAT paid on it. For VAT blocking purposes a car is amongst other things defined as a motor vehicle with three or more wheels. So a business is not blocked from reclaiming VAT for a motorbike.

2) To properly reclaim any VAT for business purposes, in whole or in part, the motorbike has to be actually used for business purposes with evidence for that, eg mileage of business trips.

3) If the motorbike is really just for personal use do not fall for the dealers' blandishments or sales patter about "putting it through the business books". If it is wholly a personal purchase and nothing to do with your business you cannot reclaim business VAT.

Happy biking.

Eamon Mc Nicholas
Tax Barrister

(This is a web comment not specific advice)

[vatexpert]

The good news is that motorcycles are not subject to the same severe restrictions as cars when it comes to recovery of VAT. In principle, if it can be shown that the bike is to be used for the purpose of the business, there is no reason why the VAT cannot be reclaimed. The bad news is that where there is significant private use Customs will require you to either apportion the VAT on purchase or recover it in full and account for output tax each period on the private use.

Joe Wilkins
www.vatexpert.net

[CDavey9501@aol.com]

It is also likely to be treated as a benefit in kind. You could consider a bicycle!