As a sole trader can I claim back the VAT on a car lease?
Filed under finance - Asked by Adrian Doyle (Wexford) - Mon, 30 Jan 2023 19:36
Answered by: Shane O' Donoghue - Complete Car Advisor - @Shane_O_D
Hi Adrian,
For the most part yes. This is from Revenue: "In the case of leasing VAT deductibility is based on 20% of the monthly leasing charges."
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Thanks for the reply, but I'm not sure what it means. Is it that the VAT applicable to 20 per cent of the lease payment can be reclaimed? Can the full lease payment be treated as an expense for income tax purposes?
Posted by Adrian Doyle (Wexford) - Wed, 01 Feb 2023 20:25:37
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Hi Adrian,
My understanding is that it's treated as a 20 per cent VAT rate regardless of how much VAT is actually paid. I also believe that the full lease payment can be treated as an expense if the vehicle is used for business purposes 100 per cent of the time.
Every circumstance is different, however, so I'd urge you run this past your accountant before making any decisions.
Posted by Shane O' Donoghue - Complete Car Adviser (Dublin) - Wed, 01 Feb 2023 20:39:41