Best way to buy Pick-up through business
Discussion
Good morning all!
I was in the market for a pickup truck anyway, and was planning to buy personally.
However on another thread on PH lots of people were saying as its classed as a commercial vehicle they have bought one through their business for basically nothing, and indicated that there was a way to almost completely offset it.
Now I've had a quick chat to my accountant but to be honest I don’t understand.
Can someone explain the best way to finance a commercial vehicle through my VAT registered Ltd company, and how much its likely to cost me?
Lets say for arguments sake its £19,999 + VAT brand new
It's used mainly for business, site visits etc, but will also be my only car, so used personally too, say 8,000 miles a year, 50/50 split personal/business.
Help as I’m very confused
I was in the market for a pickup truck anyway, and was planning to buy personally.
However on another thread on PH lots of people were saying as its classed as a commercial vehicle they have bought one through their business for basically nothing, and indicated that there was a way to almost completely offset it.
Now I've had a quick chat to my accountant but to be honest I don’t understand.
Can someone explain the best way to finance a commercial vehicle through my VAT registered Ltd company, and how much its likely to cost me?
Lets say for arguments sake its £19,999 + VAT brand new
It's used mainly for business, site visits etc, but will also be my only car, so used personally too, say 8,000 miles a year, 50/50 split personal/business.
Help as I’m very confused
I asked the same question just over a year ago when I was buying the Amarok - 100% relief through your business
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
As long as the vehicle is
a) recognised by HMRC as a commercial vehicle
b) is intended for use for the purpose of the trading activity of the business
then
i) it will be eligible for the 100% Capital Allowance claim (Annual Investment Allowance or AIA)
ii) Input VAT on the purchase price can be reclaimed
iii) personal use will be taxed under the more generous PAYE Benefit in Kind rules applying to vans and commercial vehicles
To claim the 100% Capital Allowance the vehicle must be PURCHASED by the business - contract hire, operating leases or rentals DO NOT COUNT as purchases.
Purchasing outright for cash, purchasing under a bank loan or purchasing under a HP agreement (and it MUST be a straightforward HP and not any sort of finance lease)will allow the 100% Capital Allowances to be claimed.
a) recognised by HMRC as a commercial vehicle
b) is intended for use for the purpose of the trading activity of the business
then
i) it will be eligible for the 100% Capital Allowance claim (Annual Investment Allowance or AIA)
ii) Input VAT on the purchase price can be reclaimed
iii) personal use will be taxed under the more generous PAYE Benefit in Kind rules applying to vans and commercial vehicles
To claim the 100% Capital Allowance the vehicle must be PURCHASED by the business - contract hire, operating leases or rentals DO NOT COUNT as purchases.
Purchasing outright for cash, purchasing under a bank loan or purchasing under a HP agreement (and it MUST be a straightforward HP and not any sort of finance lease)will allow the 100% Capital Allowances to be claimed.
sidekickdmr said:
Ok great, thanks for that, seems much simpler to understand.
One last question, what happens if I take it out on HP through the business, over say 2/3 years
But I want to close the business down next year?
Only hypothetical, just need to know worst case.
Thanks
When a business closes down, any assets that are still on the books at the time of closure need to be accounted for to HMRC.One last question, what happens if I take it out on HP through the business, over say 2/3 years
But I want to close the business down next year?
Only hypothetical, just need to know worst case.
Thanks
If you claimed 100% Capital Allowances when the asset was purchased, that means the asset, for tax purposes, has Nil value once the allowances have been claimed.
In reality, of course, it is likely that the asset (especially a fairly new pick up) will have some considerable market value at the date of the business closure. HMRC expects the Corporation Tax calculation at the end of the business to include the declaration of the "sale" of the vehicle for its market value at the date of disposal/closure of the business. Corporation Tax will be charged on the market value.
As far as VAT is concerned, on the final VAT return for the business VAT will be charged on the market value of the asset so HMRC will also claw back some of the VAT that was originally claimed by the business when the asset was originally purchased.
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