When leasing a car through the business, you can claim 50% of the VAT, whilst the other 50% is blocked for private use. You can reclaim all of the VAT charged if the car is used primarily for carrying passengers or providing driving services.

When it comes to repairs and maintenance on the vehicle, you can claim 100% VAT rather than 50%, irrespective of the percentage split between business and private use. HMRC’s view is that a vehicle must be kept in good working condition to enable business trips to be carried out, hence the more generous allowance on maintenance and repairs.

If you have any questions, or would like to find out more, please do not hesitate to contact a member of the VAT team on 01227 277667, or by emailing us at vat@mphaccountants.co.uk.