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Q: My client is a builder and, as well as moving building materials, also transports some of his workers to site in a double cab pickup. He is aware that with this kind of vehicle HMRC would not see private use as incidental. On the basic specification of the vehicle the payload is 1010kgs (> 1 tonne) but he is having a hard top added to the vehicle before buying it. Can this vehicle be treated as a commercial vehicle and 90% of the VAT be claimed based on the proposed use of the vehicle?My client is a builder and, as well as moving building materials, also transports some of his workers to site in a double cab pickup. He is aware that with this kind of vehicle HMRC would not see private use as incidental. On the basic specification of the vehicle the payload is 1010kgs (> 1 tonne) but he is having a hard top added to the vehicle before buying it. Can this vehicle be treated as a commercial vehicle and 90% of the VAT be claimed based on the proposed use of the vehicle?

A. 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.

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