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bigduckontax
bigduckontax, Accountant
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I am a Director of a small business along with my wife.

Resolved Question:

I am a Director of a small business along with my wife.
Hi
As we both do a large amount of mileage we are looking at getting a new car and using this as a pool car. I have looked at the five rules of the pool car and we meet them all but would be very grateful if you could clarify if the following is ok:
We run the business from home so the registered business address is also our home address. We will have our own car for personal use. The drive is large enough to accommodate both cars without the need to move one to get the other out.
Also as we are also looking to claim back the VAT, we are happy with our record but are we more likely to be audited.
Thanks
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. The days of VAT audits are effectively long gone. I can remember in the 80s having an audit where the lady inspector demanded to see the voucher for 13p, yes thirteen new pence, of input tax reclaimed! Providing that there is no personal mileage involved in the use of the business car then all VAT input tax may be reclaimed. Lexus Toyota have a very good summary which I quote: 'In summary, if a car is 'made available' for any private use at all, none of the VAT is recoverable. If this happens and VAT recovery has been blocked, it is generally referred to as a blocked car (or a 'non-qualifying' car) and it will retain this status for all future sales. Most company cars will be blocked cars.If there is no private use, all of the VAT incurred on acquisition of the new car may be recovered as input tax, subject to any partial exemption limitations of the business. Cars that have never been 'made available' for private use and consequently never had VAT wholly disallowed on their purchase, are referred to as qualifying cars.' So you see it all hinges on private use which would appear, from the tenor of your question, not happening in your case.
Customer: replied 1 year ago.
HiThank you for the reply.Regarding the first part of the question can you please let me know as we are running the business from home so the registered business address is also our home address. As mentioned we will have our own car for personal use. The drive is large enough to accommodate both cars without the need to move one to get the other out. So is there a problem that the car is kept at home even though it is also the business address, does this comply with the rule on pool cars?Thanks
Expert:  bigduckontax replied 1 year ago.
Yes, because your residence is your place of business the pool car can be located there. Here is the definition of a 'pool car' from the Gov UK web site: 'These are cars used by more than one employee for business purposes, and normally kept on your premises.' Please be so kind as to rate me before you leave the Just Answer site.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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