VAT refund on car hire?

[dovetail]

VAT charged on car hire for employees using the car within Ireland; is this something eligible for VAT refund?

 

[domainer222]

Opinion: as long as the hiring of the car was wholly, exclusively and necessarily for the purposes of carrying on the trade (business), and as long as the hiring of the car was not for travel to or from the normal location of the business, then I think you're good to go.

You need the invoice from the car company made out to your business with your VAT number and business address.

Hope I didn't miss something here!

 

[dublin67]

Opinion: as long as the hiring of the car was wholly, exclusively and necessarily for the purposes of carrying on the trade (business), and as long as the hiring of the car was not for travel to or from the normal location of the business, then I think you're good to go.

You need the invoice from the car company made out to your business with your VAT number and business address.

Hope I didn't miss something here!

I'm not sure this is the case. The principles you mention refer to the tests that must be met in order for an employee to obtain a tax deduction for expenses incurred in the course of their employment. These tests to not apply to vat. Generally speaking it is difficult to get a vat deduction for any cars and this can extend to car hire. My view is that it wouldn't be available.

 

[domainer222]

I'm not sure this is the case. The principles you mention refer to the tests that must be met in order for an employee to obtain a tax deduction for expenses incurred in the course of their employment. These tests to not apply to vat. Generally speaking it is difficult to get a vat deduction for any cars and this can extend to car hire. My view is that it wouldn't be available.

Hi @dublin67 I think we'll have to agree to disagree. I can't see how if the car hire was absolutely wholly, exclusively and necessarily for a business purpose, and the invoice was made out to the business including VAT number, that the business could not claim that VAT.

If the car hire is going to be used by the employee to go the tennis club, it looks like a BIK - unless they are laying fresh courts

 

[RedOnion]

A lot of large companies run an account with taxi companies, it's of course an allowable expense as long as it's for business purposes, this VAT is definitely claimable.

The obvious flaw with this argument is that Taxi fares are exempt from VAT...

VAT on hire of passenger road vehicles is not reclaimable in the vast majority of cases.

 

[domainer222]

The obvious flaw with this argument is that Taxi fares are exempt from VAT...

VAT on hire of passenger road vehicles is not reclaimable in the vast majority of cases.

I amended my post to reflect this reality. On your second comment - agreed, it depends on the circumstances of the case.

 

[RedOnion]

On your second comment - agreed, it depends on the circumstances of the case.

There's no 'depends' about it. The amount that can be reclaimed is limited in VAT legislation.

@dovetail
A maximum of 20% of the VAT amount can be reclaimed, so long as car was used 60% for business purposes, and was a qualifying car (tax band A B or C).

 

[dublin67]

Hi @dublin67 I think we'll have to agree to disagree. I can't see how if the car hire was absolutely wholly, exclusively and necessarily for a business purpose, and the invoice was made out to the business including VAT number, that the business could not claim that VAT.

If the car hire is going to be used by the employee to go the tennis club, it looks like a BIK - unless they are laying fresh courts

I don't particularly mind anyone disagreeing with me as I'm not really relevant here. My view comes from the categories of vat that cannot be deducted as set out in section 60(1) of the Vat Act. It is the Revenue you need to convince not me.