The correct answers are: Cars where there is an element of personal use; Entertaining UK clients.
Input VAT on cars where there is an element of personal use is blocked from recovery as is input VAT suffered on entertaining UK clients (although that suffered on entertaining overseas clients is recoverable).
Input VAT on purchases for business use is recoverable.
VAT can be recovered if an asset is used in the trade even where capital allowances are claimed. The VAT exclusive cost will enter the capital allowance computation.
Input VAT incurred in relation to staff entertaining is allowable.
