L200 Purchase, VAT & Future implications
Discussion
I am about to take on a new empoloyee, in approx 1 month from now.
The deal is all agreed, and there are no potential problems whatsoever....apart from his vehicle.
He is currently self employed (a regular contractor of mine) & is VAT registered (via the cash accounting system). In a week or so, he wants to buy himself a Mitsubishi L200 Animal 4-wheel drive jobbie, for work purposes (because we need a lot of off-road access etc).
He is hoping to be able to use the VAT-free option on the vehicle purchase (ie, if he buys it from a main dealer, he gets charged for a commercial vehicle ie, no VAT).....but, after a 2 week period after buying the car, he will become fully employed, PAYE, cancelling his VAT registration etc....and is worried that he will be required to pay HMC&E the VAT element on the vehicle.
(Oh, yes....he will be using the vehicle for company business too, I'll be paying his insurance, expenses, mileage etc etc).
Or, would it be better for him if I was to purchase/ lease a vehicle for him to use as his company car....but I believe that the tax implications are heavier for this?????
Any advise, greatly appreciated.
The deal is all agreed, and there are no potential problems whatsoever....apart from his vehicle.
He is currently self employed (a regular contractor of mine) & is VAT registered (via the cash accounting system). In a week or so, he wants to buy himself a Mitsubishi L200 Animal 4-wheel drive jobbie, for work purposes (because we need a lot of off-road access etc).
He is hoping to be able to use the VAT-free option on the vehicle purchase (ie, if he buys it from a main dealer, he gets charged for a commercial vehicle ie, no VAT).....but, after a 2 week period after buying the car, he will become fully employed, PAYE, cancelling his VAT registration etc....and is worried that he will be required to pay HMC&E the VAT element on the vehicle.
(Oh, yes....he will be using the vehicle for company business too, I'll be paying his insurance, expenses, mileage etc etc).
Or, would it be better for him if I was to purchase/ lease a vehicle for him to use as his company car....but I believe that the tax implications are heavier for this?????
Any advise, greatly appreciated.
Been informed (only because I want one 
) that the L200 can carry over 1 (or is it 1.5 Tonne) which classes it as a commercial vehicle keeping the tax down. Also been told that a lot of the other manufacturers that at the moment don't fall into the commercial bracket are adjusting their vehicles to comply thus improving sales.
) that the L200 can carry over 1 (or is it 1.5 Tonne) which classes it as a commercial vehicle keeping the tax down. Also been told that a lot of the other manufacturers that at the moment don't fall into the commercial bracket are adjusting their vehicles to comply thus improving sales.
Had one last year and because it could carry 1 tonne, then it was classed as a commercial vehicle.
If, however, you put a truck cab on the back, I'm told that C & E work on the basis that all these weigh 50 kg, which reduces your carrying capacity to less than 1 tonne - so you're possibly back to a car basis. How would they know though?
I may be wrong so do check it, our as the powers that be are trying to close this loophole for company vehicles!
If, however, you put a truck cab on the back, I'm told that C & E work on the basis that all these weigh 50 kg, which reduces your carrying capacity to less than 1 tonne - so you're possibly back to a car basis. How would they know though?
I may be wrong so do check it, our as the powers that be are trying to close this loophole for company vehicles!
There is lots of 'advice' doing the rounds at the moment about these vehicles. The basics of what I'm being told is, try and keep the payload over 1000kg by not going silly on the spec and be in a possition to prove that it is genuinely be used for commercial use. Ie, carrying plant, tools, materials etc.
As for the VAT, it would be best for you to buy the car and let him have it as a company vehicle. The tax hit is negligable and would simplify things greatly. Or he stumps the VAT bill? No brainer really.
Paul.
As for the VAT, it would be best for you to buy the car and let him have it as a company vehicle. The tax hit is negligable and would simplify things greatly. Or he stumps the VAT bill? No brainer really.
Paul.
My elder bro' has an L200 animal, beware of getting leather on board, as we had a hard time getting it passed as a CV and hence benefitting form the lower tax....the line we used to get it through in the end was that leather is easier to maintain and wipe clean for use on construction sites.
Another thing to watch is that the standard service interval is 9000 miles, but the L200 diesel requires an oil and filter change every 4500 miles which is a right pain, and not getting it done has warranty implications. Think newer ones have the option of running on fully synthetic oil and can run for 9000 miles unchanged ok, is worth checking out though.
IMHO you might be better off going for the SWB Shogun commercial, it has the 3.2 direct injection diesel engine. These are much more powerful and efficient than the L200, plus you get better brakes, suspensiopn, cabin ergonomics, etc. They are not far off the price of an L200. The dealer nearest us is supposed to be the biggest in the country for L200 / Shogun, mail me through my profile if you want their details. They have always been straight with us.
HTH
MOD.
Another thing to watch is that the standard service interval is 9000 miles, but the L200 diesel requires an oil and filter change every 4500 miles which is a right pain, and not getting it done has warranty implications. Think newer ones have the option of running on fully synthetic oil and can run for 9000 miles unchanged ok, is worth checking out though.
IMHO you might be better off going for the SWB Shogun commercial, it has the 3.2 direct injection diesel engine. These are much more powerful and efficient than the L200, plus you get better brakes, suspensiopn, cabin ergonomics, etc. They are not far off the price of an L200. The dealer nearest us is supposed to be the biggest in the country for L200 / Shogun, mail me through my profile if you want their details. They have always been straight with us.
HTH
MOD.
in terms of the VAT (if it is classed as commercial) when a commercial vehicle is purchased the VAT charged can be claimed back on the VAT return - at deregistration VAT has to be declared and paid on the market value of the assets and stock unless the VAT element within the value is less than £1000. Therefore if the total assets and stock is less than £6700 no VAT is payable.
This being the case he could continue to be VAT Registered and send in Nil returns until his total assests on which there is a VAT Charge are less than £6700, then he can de-register and no VAT would be payable.
This being the case he could continue to be VAT Registered and send in Nil returns until his total assests on which there is a VAT Charge are less than £6700, then he can de-register and no VAT would be payable.
We've solved the problem, thanks guys......we've bought a Warrior version of the L200 for the company, and will put the vehicle into our pool of vehicles. The person in question has been given responsibility of the keys & spare keys, and no tax will be paid by the individual because the vehicle is not "exclusively" for the use of one person.
Claiming the VAT back in the next return, and the vehicle will be used in both on & off road circumstances, as described in our company profile (we've got a 4x4 course being built soon on-site)....we checked it out with the VAT office, they checked our company info, and have actually advised us what vehicle to buy, and how best to maximumise the benefits..........guess the guy at the VAT office must have been a petrolhead!
Must say that I'm pleasantly surprised by the process & the outcome- shame we can't do the same for the other cars we own.
Claiming the VAT back in the next return, and the vehicle will be used in both on & off road circumstances, as described in our company profile (we've got a 4x4 course being built soon on-site)....we checked it out with the VAT office, they checked our company info, and have actually advised us what vehicle to buy, and how best to maximumise the benefits..........guess the guy at the VAT office must have been a petrolhead!
Must say that I'm pleasantly surprised by the process & the outcome- shame we can't do the same for the other cars we own.
As Eric Said needs to be in writing then it can be admitted as evidence at a VAT hearing..
To be honest i looked up this avenue (LR Double cab Pickup) but decided to be a White Van man insteaed. As its too much of a grey area in VAT terms.
It was easier and Cheaper to get a Transit Van plus it kept you load out of the elements.
Steve
To be honest i looked up this avenue (LR Double cab Pickup) but decided to be a White Van man insteaed. As its too much of a grey area in VAT terms.
It was easier and Cheaper to get a Transit Van plus it kept you load out of the elements.
Steve
Has anyone investigated the VAT status of motorhomes? I am seriously considering purchasing one of these devices as a mobile office. They are not motor cars in the normal VAT definition. They are much more akin to commercial vehicles (being usually based on van cabs and running gear) and are closely related to caravans. As most of you know, Input VAT on commercial vehicles and caravans can be recovered in full or in part.
The motorcaravanner's "bible" magazine, "MMM", seemed to indicate that VAT could be recovered on the purchase of a motorcaravan if it was to be used for business purposes. I have checked the Customs and Excise website and the relevant VAT 700 Notice but the words "motorcaravan" or"motorhome" do not seem to appear anywhere in the legislation.
Any opinions on this one?
>> Edited by eric mc on Monday 16th February 12:13
The motorcaravanner's "bible" magazine, "MMM", seemed to indicate that VAT could be recovered on the purchase of a motorcaravan if it was to be used for business purposes. I have checked the Customs and Excise website and the relevant VAT 700 Notice but the words "motorcaravan" or"motorhome" do not seem to appear anywhere in the legislation.
Any opinions on this one?
>> Edited by eric mc on Monday 16th February 12:13
eric mc said:
Has anyone investigated the VAT status of motorhomes? I am seriously considering purchasing one of these devices as a mobile office. They are not motor cars in the normal VAT definition. They are much more akin to commercial vehicles (being usually based on van cabs and running gear) and are closely related to caravans. As most of you know, Input VAT on commercial vehicles and caravans can be recovered in full or in part.
The motorcaravanner's "bible" magazine, "MMM", seemed to indicate that VAT could be recovered on the purchase of a motorcaravan if it was to be used for business purposes. I have checked the Customs and Excise website and the relevant VAT 700 Notice but the words "motorcaravan" or"motorhome" do not seem to appear anywhere in the legislation.
Any opinions on this one?
>> Edited by eric mc on Monday 16th February 12:13
Eric we all turn to you for this advice LOL
But as from your own advice to me previosly VAT stuff, its a grey area and down to the Discretion of your local VAT office, if you prove it was being used as a mobile office and not you main form of transport and limited domestic use you may be able to claim a percentage of the VAT Back.
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