- Leasing companies can recover all VAT on cars purchased for leasing at commercial rates.
- Businesses leasing a ‘qualifying car’ can usually recover only 50% of the VAT on lease payments, due to assumed private use.
- Exceptions allow 100% VAT recovery for cars used mainly as taxis or for driving instruction.
- The 50% VAT restriction also applies to short-term self-drive hires, unless the hire is for 10 days or less and exclusively for business use.
Source: bestaccountancy.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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