We have listed below some of the more commonly encountered business expenses where VAT input tax recovery is prohibited or restricted.
1. Cars - cannot reclaim VAT added to purchase price unless the vehicle is used to directly create income for the business: for example a taxi, a self-drive hire car or a car for driving instruction or where there is 100% business use and there are stipulations in place to prevent any personal use of the vehicle.
2. Car Leasing - reclaim of VAT added to car lease rentals is usually restricted to 50%.Read this post