Home / Questions / Can a Limited Company Claim VAT on a Car?
Last updated 23 October 2026. Written by the Limited Company Accountant UK team, part of Accotax. Figures are for the 2026/27 tax year; always check GOV.UK for the latest rates.
Short answer: Usually not. VAT on a car is generally not reclaimable if there is any private use, though you can reclaim 50% of VAT on lease payments. You can reclaim VAT on a car used exclusively for business, such as a taxi or driving school car.
At a glance
| Purchase | Normally no VAT reclaim |
|---|---|
| Lease | 50% of VAT on hire payments |
| Exclusive business use | Full reclaim possible |
| Fuel | Fuel scale charge or apportionment |
Electric cars
Different rules apply to company-car tax and capital allowances. A tax adviser can check which treatment suits your situation.
Commercial vehicles
VAT on vans is generally reclaimable if used for business, but private use can restrict this.
Want this handled for you?
Fixed monthly fee, named accountant, free first consultation. Get a free quote or call 0203 4411 258.
The bottom line
Usually not. If you would rather not do it alone, our fixed fees start at £45.83 + VAT a month.
Frequently asked questions
Can I claim mileage instead?
Yes. Approved mileage rates are 55p a mile for the first 10,000 miles and 25p after that.
Do I need records?
Yes. Keep mileage logs and invoices.
Ready for a fixed monthly price?
Our packages start at £45.83 + VAT and cover accounts, tax and deadlines. Get a free quote or call 0203 4411 258.
Keep reading