Reclaiming VAT on a lease car if business is partially exempt

I am a director of a small limited company. We lease a car for me through the business, and at the end of the year the total of the monthly payments is subtracted from my annual bonus (or I would owe the business money if my bonus wasn't sufficient). The monthly lease payments include VAT, and my question is on whether the VAT can be claimed back? There is a general rule that 50% of the VAT on car lease payments can be reclaimed (together with 100% of the VAT on any maintenance payments). HOWEVER - our business is partially exempt from VAT - in fact 99% of our revenue stream is VAT exempt, so we only charge it on around 1% of our turnover. Does this effect the amount of VAT we can reclaim on car lease payments? Or can we still claim back the blanket 50%? The answer impacts what ends up being subtracted from my bonus, and I have found different interpretations on the internet. Help please!

Hi,
Generally only 50% of the VAT payable on a leased car is allowable as input tax to account for any private use of the car.
If you are a partially exempt business then the VAT allowable as input tax is limited in tems of how that vehicle is used in relation to taxable supplies being made.
If the leased car is attributable to only exempt supplies then no VAT is recoverable.
If the leased car is attribulable to only taxable supplies then 50% VAT is allowable.
If the car is attributable to both taxable and exempt supplies then the Standard Method calculation is used to calculate the anount of recoverable VAT.
Please see below:
4. The standard method
Please also see the De minimis Rules:
11. The de minimis rule.
Thank you.

If your business is 99% exempt then it would be highly unlikely that the car is used 100% of the time for just 1% of the business income, more realistically, and as you are a Director, the car will be used for both exempt and taxable sales and therefore would fall to be residual input tax. So you would allocate the 50% recoverable VAT for lease cars into your "residual" pot of input tax and then perform a partial exemption calculation which would in effect see you only being able to reclaim 1% of the "residual" input tax, in other words, you'd only be able to reclaim 1% of the 50%...unless the business is de minimis and de minimis status is only confirmed by performing a partial exemption calculation and subsequent annual adjustment.. That you ask a question about whether you can reclaim 50% input tax on car lease suggests the business is not aware of partial exemption, which is mandatory for a business that makes exempt supplies. If the business is aware of partial exemption and the requirement to restrict input tax on its expenditure, then you may need to speak to the finance person at the company who prepares the VAT returns and performs the partial exemption adjustments as they are more likely to know the exact % of VAT that can be reclaimed on the lease car.