Claiming Input Tax on Logo Carrying Assets.

We have often been asked whether displaying a business logo and other details on an asset such as a car, van or other asset allows input tax to be reclaimed on the purchase of that asset. Well the answer depends on the function of the asset. It is reasonable to assume that the resultant exposure is a good way to promote a business, but is that exposure enough to justify a 100% input tax claim on the purchase price?

This is where the business purpose test comes into play. Input tax can only be claimed on expenses that are incurred for business purposes. Therefore, if an expense has a dual purpose, input tax can only be claimed on a fair and reasonable proportion of the cost.

When looking at the cost of the design and branding of the asset, it is reasonable that all associated costs can be considered as business expenses and all input tax reclaimed.

If you have any further questions our specialist team will be happy to advise you. Just call us on 01524 67111 to set up a meeting at your premises or in our Lancaster office.