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This guidance note looks at the rules for recovering VAT when purchasing and leasing cars or other vehicles. In particular, it looks at the input tax ‘block’ that applies to many cars. It also covers the VAT consequences that arise when a vehicle is put to some private use or where it is purchased and then subsequently sold by a business.

The recovery of VAT on motoring expenses (eg fuel costs and the charging of electric vehicles) is covered separately in the Input tax ― motoring expenses guidance note.

For an overview of input tax more broadly, see the Input tax ― overview guidance note.

For in-depth commentary on the legislation and case law in this area, see De Voil Indirect Tax Service V3.443.