VAT Question of the Week 2


My client is a landscape gardener and has recently purchased a Nissan Navara double cab vehicle to use for his 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.


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.

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