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TaxRobin
TaxRobin, Tax Consultant
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Experience:  International tax
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I want to buy an expensive car in uk but not have to pay VAT

Resolved Question:

I want to buy an expensive car in uk but not have to pay VAT - I have a RAK Dubai offshore company. Can I use this?
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.

Hello,

The basics on VAT :

VAT is a tax that you pay when you buy goods and services in the European Union (EU), including the UK. Dubai is not an EU country. I advise that because if you are buying the UK then you would not have to pay VAT again in the country where the vehicle would be used if the country is an EU country.

VAT is a tax you pay when you buy goods or services from a VAT-registered business in the EU, including within the UK.

Even when one imports a new or used motor vehicle permanently into the UK you must normally pay VAT and duty.

Purchasing the vehicle in the UK for use in the UK would not exempt VAT on the purchase unfortunately even if purchased by the Offshore company.

Customer: replied 2 years ago.

So how can I avoide paying VAT?

Expert:  TaxRobin replied 2 years ago.
Hello again Jay,
When a registered company in the UK sells the vehicle in the UK they must charge VAT. Once someone's registered for VAT, they then have to charge VAT where it is due.
Sometimes the answer is not the answer hoped for but in your case you can not avoid the VAT on the purchase of a vehicle in the UK that will be used in the UK.
If you wished to avoid VAT do not purchase in the UK. But, if you bring the vehicle to the UK VAT will then be charged at import.
Nearly all goods and services are liable for VAT, although in a very few cases the rate is reduced or even zero rated.
Your options would be to purchase outside the UK and use outside the UK.
Have your registered UK business purchase but then you could only use for business.
Customer: replied 2 years ago.
So if I buy through a UK company vat registered and use it for business, can I claim back the vat? What do I need to prove to say its used for business?
Expert:  TaxRobin replied 2 years ago.

Hello Jay

Yes, the UK business would be allowed to reclaim for VAT.

You cannot reclaim VAT paid for goods and services that are used for non-business activities.

You should be prepared to justify your method to HMRC when you have a VAT inspection. Your type of business and a log of the vehicle's use would be a good record to have.

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