HMRC and VAT

[Farmer]

Hello all,

I am considering either a new N1 5 seater or nearly new. I have read lots of material on VAT reclaim and spoken to my accountant.

The use is case is the vehicle would be 100% for farm use. If not on the farm then making local deliveries. There would always be proof of business use in the vehicle; fridge, meat, feed etc. We are remote and serve the local community with our produce.

My accountant is saying we can claim the VAT given 100% business use. Has anyone actually done this and what was your experience? BIK and pool care are not relevant given the farm/company activities (only drivers would be myself and I).

I know this subject has been done to death, however understanding how others got on with help us make the decision. We are 90% sure we will proceed with the purchase.

Many thanks.

 

[Cheshire cat]

Hi Farmer
Welcome to the forum.
Can't say for sure that a five seater N1 will work. I think it has to be the two seater commercial for the VAT reclaim. I'm sure your local Ineos dealer could put you right on the subject.

 

[Jeremy996]

If it is 100% business use, you should be fine. The final arbiter is your local Inspector of Taxes, but even they have to follow the law.

 

[lightning]

l looked into this back in 2022 when l was looking at a Grenadier for my business.

On HMRC website it says they base their classification on "what the vehicle was manufactured to do, rather than the use to which it is being put"

The same argument has gone on for years over the old model Defender five seat "Commercial" although it does have the advantage of over 1 tonne payload.

HMRC say the Grenadier 5-seat is a car, but l guess if you are a farmer and it's obviously in use as a farm vehicle it's likely the tax man will look upon it favourably if it ever gets checked.

But, if they dig their heels in you're going to get a stinker of a back tax bill.

 

[landmannnn]

Hello all,

I am considering either a new N1 5 seater or nearly new. I have read lots of material on VAT reclaim and spoken to my accountant.

The use is case is the vehicle would be 100% for farm use. If not on the farm then making local deliveries. There would always be proof of business use in the vehicle; fridge, meat, feed etc. We are remote and serve the local community with our produce.

My accountant is saying we can claim the VAT given 100% business use. Has anyone actually done this and what was your experience? BIK and pool care are not relevant given the farm/company activities (only drivers would be myself and I).

I know this subject has been done to death, however understanding how others got on with help us make the decision. We are 90% sure we will proceed with the purchase.

Many thanks.

You can claim back the Vat on any vehicle that is genuinely 100% business use, be it a Fiat Panda, Ineos Grenadier or a Rolls Royce.

 

[Forrester]

I don't think you can claim the VAT back on car even if it is 100% business use. You can only claim on a van. I have the two seater 2025 Commercial Edition and it is modified to have no rear passenger door windows (blacked out glass, I think), metal panels where the glass should be just behind those and a fixed partition separating the two front seats from the rear space. I also got a certificate from Ineos saying that be vehicle was an N1 van just in case HMRC checked.

However, I haven't claimed the VAT back (even though I'm VAT registered) because I use the Grenadier solely for domestic & pleasure and I just can't be bothered with all the BIK stuff and P11Ds etc.

The Grenadier has nothing to do with my business in any case: I need the Commercial because I have three very large wolf sized hounds to ferry around and the full length metal grid partition works just fine to keep them from driving off with the thing. It works perfectly for what I need - not even any problems with the heating and I absolutely love the steering and overall feel of the machine.

However, you can claim running costs, etc. as a farm vehicle, no problem. You just can't claim the purchase VAT back on a car, but you can on a van.

Just my understanding - I'm not an accountant!

 

[landmannnn]

I don't think you can claim the VAT back on car even if it is 100% business use. You can only claim on a van. I have the two seater 2025 Commercial Edition and it is modified to have no rear passenger door windows (blacked out glass, I think), metal panels where the glass should be just behind those and a fixed partition separating the two front seats from the rear space. I also got a certificate from Ineos saying that be vehicle was an N1 van just in case HMRC checked.

However, I haven't claimed the VAT back (even though I'm VAT registered) because I use the Grenadier solely for domestic & pleasure and I just can't be bothered with all the BIK stuff and P11Ds etc.

The Grenadier has nothing to do with my business in any case: I need the Commercial because I have three very large wolf sized hounds to ferry around and the full length metal grid partition works just fine to keep them from driving off with the thing. It works perfectly for what I need - not even any problems with the heating and I absolutely love the steering and overall feel of the machine.

However, you can claim running costs, etc. as a farm vehicle, no problem. You just can't claim the purchase VAT back on a car, but you can on a van.

Just my understanding - I'm not an accountant!

Yes, you can claim back vat on a car. For example a taxi or a funeral car with 100% business use.

I was being slightly flippant, a farmer would be very unlikely to use a car for 100% business, so an N1 would have to be the choice.

 

[Farmer]

You can claim back the Vat on any vehicle that is genuinely 100% business use, be it a Fiat Panda, Ineos Grenadier or a Rolls Royce.

Thank you all for you comments. The above from landmannnn is what I have been advised from my accountant. As long as it's 100% business use (which it is), then you can claim the vat back on any vehicle. We have other vehicles for private use and we would insure it for business use only.

 

[Farmer]

Yes it would be an N1, just with 5 seats. We need the extra seats as we are very often 5 people going to events (auctions, markets and shows etc.).

 

[Cheshire cat]

Well, Farmer
Hope you now feel more knowledgeable regarding the situation.