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Claiming VAT on vehicles purchased

  • 08-03-2013 10:54am
    #1
    Seve OB
    Registered Users, Registered Users 2 Posts: 16,186 ✭✭✭✭


    Friend of mine has set up a ltd. company and has purchased some cars to rent out.

    He paid a sizeable deposit, about 25% on the vehicles and financed the rest.

    The financing was done on a HP agreement so I presume he will get a VAT receipt each month for the repayments which he can claim VAT back on?

    Can he claim back the VAT paid out for the purchase of the vehicles? he did not get a VAT receipt for the deposit he paid.

    He will obviously charge VAT on the rental of the vehicles and pay it over to the revenue.


Comments

  • #2
    smeharg
    Registered Users, Registered Users 2 Posts: 300 ✭✭smeharg


    So, this person has set up limited company, purchased cars, intends to operate a car hire business and he's using internet forums (via a third party) for professional advice???

    Your friend really needs to get an accountant.

    But to answer your questions, the supply (for VAT) occurs when the goods are handed over. There is no VAT charged on the individual hire purchase payments.

    The hire purchase agreement usually doubles as a VAT invoice and VAT can be reclaimed on foot of this document, provided it contains all the details that a VAT invoice would.

    See here for more details http://www.revenue.ie/en/tax/vat/leaflets/hire-purchase-transactions.html

    Presumably the company has registered for VAT and your friend knows which rate(s) to apply.


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