Cheapest way to run a vehicle for business?

[Tyson1980]

Hi guys,

I basically need a larger vehicle for dropping and picking people up for the distribution element of my business.

Am i correct in stating that since i am a director of a Limited Company i would be able to reclaim VAT back?

Can i also use the vehicle for personal mileage? Anyone have any recommendations for a 5-7 seater commercial vehicle? I assume the payload has to be over 1000kg?

Cheers

[Tyson1980]

doogz said:

Are you VAT registered?

Are you on the flat rate scheme?

You can claim mileage, 45p for the first 10,000, or 12,000? Then 20p thereafter? TBH i've just made those numbers up, i can't quite remember, Mr Accountant deals with that.

YUP VAT registered. On flat rate...

I thought the 45p applied to all vehicles regards business use. Not just commercials..

I need to speak to my accountant also. But eager to trawl through autotrader looking for what to buy..

[Jamie VTS]

Are you powerfully built?

[Iain XR4i]

If you are VAT registered your business can recover the VAT on the purchase of a commercial vehicle or a car used EXCLUSIVELY for business purposes. If you lease, you can recover the VAT on the rentals.

If you use a commercial vehicle privately, the VAT recovery isn't affected so long as the private use is incidental. If you use a company car for private use you can't recover the VAT at all.

You will be liable for BiK if you use a car or commercial privately, though there is an exemption for very occasional private use of a commercial.

Your accountant is the one best placed to advise on which funding method, and reimbursement method is best for you.

[Lefty]

BIK on a commercial is only £3000 anyway.

Looked at the VW T5? You can get it as a kombi - 6 seats and a decent loadbay. Caravelle might be a possibility too but I doubt you'd get it registered as a commercial vehicle.

[Lefty]

doogz said:

Tyson1980 said:

YUP VAT registered. On flat rate...

I thought the 45p applied to all vehicles regards business use. Not just commercials..

I need to speak to my accountant also. But eager to trawl through autotrader looking for what to buy..

Well, if you're on the flat rate scheme, you can't claim back VAT, that's the point in it. You get the benefit by only paying back a percentage of what you charge.

Have you looked into licencing? Are you going to be charging people for driving them about? What sort of business are you in?

You can claim back VAT on single items over £2500 while you're in the flat rate scheme.

[Vladimir]

We've considered it many times but unless you want a 1.0 Polo or similar, it's just comically expensive.

We just buy them ourselves and claim back work mileage. However ours aren't commercial vehicles- could work out doable but if the list price is anywhere near useful level, you'll get killed on BIK tax. Bloody annoying.

[Tyson1980]

Just got off the phone with my accountant.

He states its a stupid idea since all i'll be doing is ferrying people to and from and carrying a few boxes. Better to claim the mileage back in his opinion.