New Business Vehicle - what to do.

[VEX]

So I cant believe it is time to change my truck. Collected it 4 years ago in November (coming) so if there is something specific I want then I need to start thinking about it now so the timings work.

So help me choose.

I currently have a double cab pickup with a canopy on the back for tools and kit etc storage. It has worked well and I would certainly consider having another one. It is currently an Isuzu and want to maximise the load space but keep the 5 seat option.

However, there is a new option in town, which is the new range or crewcab vans from Ford (Custom) and the established VW Transporter and Merc Vito. Without being snobby, I need a good looking van because of the clients and customers I have. The Renault/Vaxh/Nissan is to common and a bit dated now.

So what to go for, Pickup or Van?

I need a low deposit Lease scheme over 3 or 4 years.

V.

[3200gt]

Surely if you bought outright, as it is a van/pickup, you can reclaim the vat. depreciate it over 5 years on the books, when it has no book value, buy it off the company for £1 then sell it and start again, allowing you to have the residual value as effectively a tax free cash lump sum.
Sounds good but Eric will be along to pick holes it from a legal stand point shortly.

[Dr Interceptor]

3200gt said:

Surely if you bought outright, as it is a van/pickup, you can reclaim the vat. depreciate it over 5 years on the books, when it has no book value, buy it off the company for £1 then sell it and start again, allowing you to have the residual value as effectively a tax free cash lump sum.
Sounds good but Eric will be along to pick holes it from a legal stand point shortly.

This.

Also makes it easier to sell, as privately you can sell for cash and won't have to charge VAT, which you would if the company sold it (assuming you're VAT registered).

Buy vans, lease cars, is my general rule of thumb.

[MrSparks]

3200gt said:

Surely if you bought outright, as it is a van/pickup, you can reclaim the vat. depreciate it over 5 years on the books, when it has no book value, buy it off the company for £1 then sell it and start again, allowing you to have the residual value as effectively a tax free cash lump sum.
Sounds good but Eric will be along to pick holes it from a legal stand point shortly.

Would be interested to find out if that is legal? I have 6 company vans for sale with little to no book value and contemplating a new Nissan Navara purchase on a 4 year finance purchase, would be interesting to know if that's "legal" as it'll help the purchase decision as well. I'm already assuming grey area, but grey area doesn't mean it isn't legal

[LouD86]

MrSparks, what vans are you selling? I could be interested. I buy and sell commercials for a living

[Countdown]

3200gt said:

Surely if you bought outright, as it is a van/pickup, you can reclaim the vat. depreciate it over 5 years on the books, when it has no book value, buy it off the company for £1 then sell it and start again, allowing you to have the residual value as effectively a tax free cash lump sum.
Sounds good but Eric will be along to pick holes it from a legal stand point shortly.

I think the sale of the van would be vat-able and any profit on disposal would also be taxable.

[LooneyTunes]

http://www.hmrc.gov.uk/payerti/exb/a-z/a/assets-tr...

[Eric Mc]

Countdown said:

3200gt said:

Surely if you bought outright, as it is a van/pickup, you can reclaim the vat. depreciate it over 5 years on the books, when it has no book value, buy it off the company for £1 then sell it and start again, allowing you to have the residual value as effectively a tax free cash lump sum.
Sounds good but Eric will be along to pick holes it from a legal stand point shortly.

I think the sale of the van would be vat-able and any profit on disposal would also be taxable.

Any commercial vehicle (van, pick-up, truck etc) will be eligible for the 100% Annual Investment Allowance - so it is worthwhile making this claim in order to get maximum write off against your Corporation Tax profit.

If the business is VAT registered, it can, of course, reclaim the VAT on the cost of the vehicle.

Obviously, if you claim the 100% Capital Allowance on the vehicle, if and when the van is disposed of, 100% of the disposal proceeds will be taxable through a Capital Allowance adjustment. Obviously, what tax is due will be based on how much you get for the vehicle (and this includes any trade-in value received when replacing it).

If the vehicle is removed from the business and (as has been suggested) passed to the proprietor for little or no sale proceeds, then HMRC expects that the Market Value of the vehicle at the date of disposal is used in the Capital Allowance disposal adjustment - rather than the small or non-existent actual sales proceeds.

VAT also follows a similar path. If the vehicle is sold or traded in, Output VAT will be charged on the sales/disposal proceeds. If the vehicle is transferred to personal ownership of the proprietor, then VAT should be declared on the market value of the vehicle at the date of disposal.

[MrSparks]

LouD86 said:

MrSparks, what vans are you selling? I could be interested. I buy and sell commercials for a living

2 x 06 fiat ducatos, 1 x 05 fiat ducato, 1 x 06 fiat doblo and 1 x 06 peugeot boxer (same as ducato) did have 6 but appear to have sold one pending payment next week.

They are in varying conditions, the peugeot is in good condition, the others are "fair" but have the usual dents and scuffs etc. they all drive well and mileage varies from 80k - 120k. I have a list somewhere if you are interested. I'm contemplating "we buy any van" at the minute as they've offered an initial quote of £1250 + VAT for the bigger vans, I can safely assume they'll try to bump that down but not sure by how much but if they get them gone quickly it's worth considering.