VAT exemption on a car private purchase

Kelly_Denning21

I had struggled to find the information I needed about both a car and a person qualifying for a VAT free purchase of a car. So I’m sharing what I found out here.

Context: we are a two old battered car household (one being disabled class), looking to use our savings to purchase a new car outright to keep ‘forever’.

When I applied for disabled class road tax, I understood that this class meant that my car could ONLY be used by me or by someone using it ONLY for my benefit. I was looking for information to confirm or deny that the rules for VAT exemption were the same.

Reading the government information on VAT exemption confused me because it said that the car must be for the personal and domestic use of the disabled person, which seemed to be the same rule as for car tax, but it didn’t use the word ONLY.

However, in reference to a person buying a car FOR me it said it should be PRIMARILY for the use of the disabled person. The examples given were for a person not living at the same address.

I was confused because it seemed like a person who didn’t live with me could use the car for their personal use but my husband couldn’t!!

I visited countless forums and encountered opposing opinions on all of them, so I decided to telephone HMRC, and spoke with a member of their VAT technical team.

I told them about my confusion and was told that:
* car tax is a completely separate thing with it’s own rules
* car to be used PRIMARILY for the disabled person applies to all circumstances 
* PRIMARILY can be thought of in percentages of use if that’s helpful
*incidental use by the spouse is permitted 
* spouse driving to work every day was given as an example as being definitely NOT primarily for the use of the disabled person
* they trust that people who apply for VAT exemption are entitled to it
* it is impossible for them to monitor the specific use of any VAT exempt vehicle but they do investigate if complaints of abuse of the system are received.

So for us this is all good news because I already use my car far more frequently than my husband uses his, so we wouldn’t need to change anything to comply with the VAT exemption for a new car.

Alex_Alumni

Hi @Kelly_Denning21 and welcome to the community to help other members discuss your post, I've moved it into our transport category. 

I'm sure someone with experience of this will be happy to share their thoughts.

If you're unsure about anything on the forum in the meantime, please don't hesitate to ask.

Alex

wilko

Just to add some more thoughts, it must be used for the benefit of the claimant. So if the partner is using the car for say going fishing, walking the dog or our bird watching ect. Although the claimant is not present or involved they are benefiting by the fact that their cater is having a break away from their duties the claimant is happy that their carer is having some me time. I am entitled to free car tax but I choose to pay the £20 car tax so as my daughters can use the car for any purpose without me being involved it not then classed as a disability car. If ever in doubt ask mobility service about terms and conditions of use if it’s a mobility car or DVLA reference to car tax relieve.

woodbine

I found this online:

Buying a VAT-free car as a disabled driver

Wheelchair users who require a vehicle with 'permanent and substantial' modifications, such as steering wheel controls or a ramp, can avoid paying VAT on cars as long as the car is for their own personal or domestic use. This includes cars that are leased under the Motability scheme.

The car can be bought by either a disabled driver or - if they are unable to drive - someone close to them, such as a parent, child or carer. The key rule is that the vehicle must primarily used for the benefit of a wheelchair user or someone who needs to be transported by stretcher.

After reports that the system was being abused, only one adapted car can be bought every three years by, or for the benefit of, a wheelchair user. There are exceptions for cars that are stolen or written-off.

Full details of the terms and conditions for getting a VAT-free car as a disabled user are published on the government's website.

There's also a form that must be filled in before you buy an adapted vehicle because VAT cannot be reclaimed after you have bought one.