Is input VAT recoverable on the purchase of a car?

Published: 21/08/2019 By Thomas Agyapong

The input tax on the purchase, acquisition, or importation of a motor car is generally blocked. The blocking order is outlined in SI 1992/3222 VAT (Input Tax) Order 1992.

The term 'qualifying car' is widely misunderstood; not least by car dealers who often tell potential purchasers that it means the car qualifies for VAT recovery.

A car is a qualifying car when it has not been subject to the input tax block and therefore VAT is charged on its sale. The block does not apply to a car to be used for one of the following purposes:

- as stock in trade of a motor manufacturer or dealer;
- primarily for the purpose of taxi hire; self drive or driving instruction, or
- exclusively for a business purpose and not made available for any private use.

If you have any questions regarding the input tax on the purchase of a car, please give us a call on 020 8661 7878 or email