claiming vat back / expenses on car parts / repairs

voxpop

Hi - just something I was mulling over - maybe someone can help. Im a sole trader and registered for VAT. When getting my car repaired or buying parts for the car, can I claim the vat back when doing my VAT3 and also can I write off the rest as an expense at the end of year ?

nompere

voxpop wrote: »

can I claim the vat back when doing my VAT3?

Yes

voxpop wrote: »

also can I write off the rest as an expense at the end of year ?

Yes

voxpop

Cheers for the quick answers, Does this have any implications when selling the car down the line? Btw the car is my own personal car, but used for work

Toblerone1978

voxpop wrote: »

Hi - just something I was mulling over - maybe someone can help. Im a sole trader and registered for VAT. When getting my car repaired or buying parts for the car, can I claim the vat back when doing my VAT3 and also can I write off the rest as an expense at the end of year ?

Are you using the car for private use? If so, you need to determine how much is for private use and how much is for business use (mileage is probably the easiest and most acceptable method for this). Using this split, you can also claim part of the VAT on these costs.

Please note that you can make a (partial?) reclaim for VAT on diesel, but no VAT reclaim is allowed on petrol cost even if the car is used solely for business use.

If you are using the mileage basis for your split, you should keep a log of your business trips in accordance with Revenue instructions in their briefing, IT51.

You can deduct expenses in relation to your business mileage and the Revenue actually has a specific form for this, which can be seen here.

You mentioned that you're self-employed. You wouldn't happen to be "self-employed" via a limited company you own? If so, there is an alternative (and probaby easier and better) to do this.

voxpop

Yes Im using for both personal and business, however I work in the same office, ie have just one client - so I figured mileage wasnt any use or couldnt be claimed or do you mean just use the mileage to the office to work out the percentage that is work related over personal and then apply that percentage to VAT and expenses on the car (diesel also)

nompere

Revenue are very keen to see a proportionate basis of recovering VAT when a business is partly chargeable and partly exempt, but they don't get concerned in relation to private use except on the purchase of assets - not the repair or maintenance of them. So there's a 43 page guide to apportionment of VAT, which has half a page discussing private use.

In practice I have never seen Revenue look for a private use adjustment for VAT - not even in the course of audits. So voxpop may safely recaim all the VAT on repairs and diesel, as long as he has proper VAT invoices.

Toblerone is quite correct in his comments about the income tax treatement of expenses where there is private as well as business usage.

Mileage to and from the office isn't business mileage for income tax purposes. Again, in practice, Revenue very rarely argue with a 1/3rd add-back for private usage of a car. It's simpler for both sides to put in that fraction and move onto something more important.

voxpop

Im a sole-trader btw.


So if Im reading this right nompere - I can claim back VAT on repairs and repair parts for the car (i.e. buying a sensor from the dealer) as well as the vat on any diesel I use. I can claim for all the VAT here using the VAT3 form.
Then at the end of the year - when doing my self-assessment I can claim 2/3rds on the same repairs and parts (ex vat) as a business expense ?