Input VAT is normally only available for deduction with respect to motor cars in very limited circumstances and subject to extremely tight criteria. One of the exceptions is where a car is used wholly for private hire (e.g. a taxi or a self-drive hire car).
Where a car is provided for self-drive hire, not only must any vehicle on which the input tax deduction is claimed be used solely for that purpose, it must also be demonstrated to have been so used.
In a recent case involving a claim for input tax deduction in respect of a Bentley, HM Revenue and Customs demanded to see evidence of the relevant hire contracts, the identification checks provided by customers, the mileage records relating to the individual hires of the vehicle and proof of insurance cover.
In the absence of sufficient supporting information, the claim was rejected.