Without the hard top added, the payload is over 1 tonne and so normal VAT recovery rules apply; as long as the client has some form of supporting evidence, they would allow the VAT incurred to be split between 90% business use (recoverable in normal way) and 10% private use (not recoverable) as per HMRC's internal manual VIT51500. However, the addition of the hard top reduces the payload. In accordance with an administrative agreement with the SMMT (motor trade organisation), as per chapter 23 of N700/57, the addition of a hard top (deemed at 45kg) will convert the vehicle into a car (965kg payload). With a car, if there is any availability for private use, the car input tax block is in play, as per chapter 3 of N700/64, and so no input tax can be claimed.
These publications from Markel Tax were correct at the time of going to press and should be considered as principles-based guidance only. To check current validity, call the Markel Tax helpline. ICAEW (as distributor) disclaims all liability for any errors or omissions.
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