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• # 120143
• Tue 05 Oct 2021 03:20 PM

Hi, i know you can claim 50% of the VAT back on a lease car but what about if the company leasing it needs to invoice a sister company as it is now used by them. Do i raise a sales invoice the same as the lease company with 20% VAT and then only claim 50% of the VAT when processing the invoice for the sister company?

Hope that makes sense?

Thanks

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• # 120144
• Tue 05 Oct 2021 07:32 PM

Hi,

That would be my understanding as you will be dealing with the car purely as a business transaction by "recharging the lease payments", perhaps in the form of a hire and there would be no use of the car, private or otherwise from the original lessee company. So they (the original lessee) would claim 20% as input vat and charge 20% in turn to the sister company.

If the sister company has private use for the car, they would claim 50% of the input vat.  If there is no private use all the vat may be reclaimable see https//www.gov.uk/reclaim-vat/cars

Hope this helps

Mark

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