Q: I am a landscape gardener and have recently purchased a Nissan Navara double cab vehicle to use for my work. There will be some private use as well as business use. I had thought this might qualify as a commercial vehicle rather than a car, although I am feeling a little uncertain as the vehicle does have passenger seats to the rear of the driver and there are windows for those rear seats. If it qualifies as a commercial vehicle I would be able to recover the input tax, perhaps with some restriction for private use. I looked on the HMRC website to check my thoughts and under the heading “Commercial Vehicles”, having searched for reclaim of VAT on commercial vehicle, it says, “You can usually reclaim the VAT for buying a commercial vehicle (like a van, lorry or tractor) if you only use it for business.” (https://www.gov.uk/reclaim-vat/cars). Does this mean the rules have changed and I cannot recover any input tax at all if there is private use even if the vehicle qualifies as a commercial vehicle?


A. Let us first ascertain whether the vehicle in question is a car or a commercial vehicle as this will be the starting point for deciding if input tax is recoverable.

The VAT definition of a car is in Statutory Instrument 1992/3122. The basic definition is that it is a vehicle to be used on public roads that has three or more wheels and is either constructed or adapted solely or mainly for the carriage of passengers, or has to the rear of the driver’s seat roofed accommodation which is fitted with side windows or which is constructed or adapted for the fitting of side windows.

This definition may lead us to the conclusion straight away that the Nissan Navara double cab will be a car for VAT purposes.  However, there are important clauses in the legislation further defining what is or is not a car.  A vehicle constructed to carry a payload of one tonne or more is not a car for VAT purposes.  This is a very important factor for double cab vehicles as many of them will have a payload of over a tonne and therefore will qualify as commercial vehicles.  Your client should check the specifications of his particular model to check if the payload is over one tonne.  If it is, his vehicle is a commercial vehicle rather than a car.  Similarly, if the unladen kerbside weight of the vehicle is three tonnes or more this excludes it from the definition of a car.

Having established whether the vehicle is a commercial vehicle or a car let us now consider the implications for recovery of input tax on the purchase.

Input tax recovery on a car is blocked unless:

  • it is stock in trade for a manufacturer or dealer, or
  • it is intended to be used primarily as a taxi, driving instruction car, or self-drive hire car, or
  • it will be used exclusively for business purposes and would not be made available for the private use of anyone.

The last of these conditions place a very high burden of proof on the taxpayer as it requires measures to be in place preventing the taxpayer or their employees from using the car for private use – even, for example, in case of emergency – and thus is difficult to meet satisfactorily.

The comment you quote from the HMRC website about the recovery of VAT on a commercial vehicle is slightly misleading.  The rules have not been changed and it is still the case that input tax on a commercial vehicle purchased by the business can be recovered, even if there is an element of private use. If there is to be private use of the vehicle as well as business use, then the taxpayer has a choice to either:

  • apportion the input tax recovered at the outset; so what is recovered equates to the anticipated business use proportion, or
  • recover the input tax in full at the time of purchase and then account for output tax on private use each quarter using the Lennartz principle.

If using apportionment at the outset, the taxpayer needs to be able to demonstrate how he arrived at the proportion used, which must be fair and reasonable.

To see how to make the Lennartz calculation use the reference in HMRC Input tax manual VIT25540.


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