Input tax incurred on the purchase of a car cannot be recovered, except for:

(1)‘stock-in-trade’ cars (Value Added Tax (Input Tax) Order 1992 (SI 1992/3222), art. 7(2)(aa));

(2)cars intended to be used exclusively for business purposes (Value Added Tax (Input Tax) Order 1992, art. 7(2)(a) and (2E)(a); the ‘relevant condition’). KPL Contracts Ltd [2006] BVC 4,097 successfully reclaimed input tax on two rally cars bought to promote business, i.e. the cars were used for business purposes. The cars were driven in competition by the managing director;

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