Motortrade insurance & trade plates
Discussion
So I run a small car sales company, rare sports and performance stuff mainly. I have all the correct insurance to cover me on my own stock, my own personal car, and my customers cars (for the detailing side)
But with the new tax regulations, and every car that I buy no longer has 'tax', I have had to get some trade plates - That's fine, guess they'll come in handy anyway even though all things I tend to buy have tax and mot.
So inform my insurance of the new trade plates, all fine - They send the certificate out and it clearly states for motortrade use only and not for Social and pleasure use - Makes sense I guess
However, I pay a fortune for my insurance (being 24 and wanting fully comp cover on 'sports and performance' including stock cover doesn't come cheap) and now in theory I can't use the social side of the policy at all, because I have to use trade plates for everything anyway, and I can't use them for social.
The cost of my insurance was £3350, and £904 of that is the social side - Last year was fine as I probably did a good few thousand miles for fun in various things, now, I'm insuring my VW UP to use as my daily run around for £904 when I can insure that with a normal policy for £284. Stupid f
king system..Was this an oversight by the DVLA? It's not just me who takes stock home at night, most independent car dealers usually take what ever is dirty home for the weekend, and now in theory we can't.
What are others doing?
But with the new tax regulations, and every car that I buy no longer has 'tax', I have had to get some trade plates - That's fine, guess they'll come in handy anyway even though all things I tend to buy have tax and mot.
So inform my insurance of the new trade plates, all fine - They send the certificate out and it clearly states for motortrade use only and not for Social and pleasure use - Makes sense I guess
However, I pay a fortune for my insurance (being 24 and wanting fully comp cover on 'sports and performance' including stock cover doesn't come cheap) and now in theory I can't use the social side of the policy at all, because I have to use trade plates for everything anyway, and I can't use them for social.
The cost of my insurance was £3350, and £904 of that is the social side - Last year was fine as I probably did a good few thousand miles for fun in various things, now, I'm insuring my VW UP to use as my daily run around for £904 when I can insure that with a normal policy for £284. Stupid f
king system..Was this an oversight by the DVLA? It's not just me who takes stock home at night, most independent car dealers usually take what ever is dirty home for the weekend, and now in theory we can't.What are others doing?
Spangles said:
My trade policy states that I can only drive vehicles not owned by me for motor trade purposes only, I'm surprised yours doesn't.
And trade plates are also only to be used for motor trade purposes so it doesn't really make much difference what your policy says.
My policy covers what yours does but allows me to use said vehicles for SDP&C and also covers permanently owned vehiclesAnd trade plates are also only to be used for motor trade purposes so it doesn't really make much difference what your policy says.
Chipmunk1 said:
I see what your saying, basically there's no point in having social cover, unless you tax the stock cars you want to drive, which is madness, a perk of the job gone for many a salesman there!
Not just that - you'd need to be the RK of the stock otherwise the tax would disappear when you sell it and not come back to you!Chipmunk1 said:
What's that ? The Benifit of driving a taxed Px car for a few weeks ? Please explain your stupid comment Mr stroen
It's not a very hard concept.troenhttps://www.gov.uk/calculate-tax-on-company-cars
Depends to a degree whether you operate as a Ltd company and you are an employee of the company in which case the car belongs to the company or you operate as a self employed in which case they are all your cars anyway.
If they're your cars then, as others have said, you need to register in your name and tax (which at least you can now do for 1 month and cancel dd) if you want to use it for SD&P.
If they belong to the company then in most cases HMRC will have agreed what sort of tax liability there is depending on the nature of the use the salesmen get out of them. Each case is usually unique as different businesses put different rules on what they can do with the cars but, technically, there is potentially a tax liability.
If they're your cars then, as others have said, you need to register in your name and tax (which at least you can now do for 1 month and cancel dd) if you want to use it for SD&P.
If they belong to the company then in most cases HMRC will have agreed what sort of tax liability there is depending on the nature of the use the salesmen get out of them. Each case is usually unique as different businesses put different rules on what they can do with the cars but, technically, there is potentially a tax liability.
Chipmunk1 said:
What's that ? The Benifit of driving a taxed Px car for a few weeks ? Please explain your stupid comment Mr stroen
Because if you are supplied with a car as an employee (regardless of whether you own the business) that is a benefit in kind, i.e. you are getting a company car.troenIf an employee has the right to use of a car HMRC certainly consider that a BIK. There are various bizarre schemes for working this out including one where you have to identify what cars are available on a certain day in January and average it out through the year.
There are also potential VAT issues if you make cars on which you have claimed input VAT on as stock cars available for private use although HMRC seem quite relaxed about this as long as it is not long term.
Chipmunk1 said:
What's that ? The Benifit of driving a taxed Px car for a few weeks ? Please explain your stupid comment Mr stroen
I think HMRC can explain it rather better.troenhttp://www.hmrc.gov.uk/manuals/eimanual/EIM23800.h...
It's taxable as a BIK. Either you can work it out on a daily basis for each individual car, or there is an averaging scheme.
HMRC do pay visits to businesses, and it's something they would obviously have on their agenda to ask about when dealing with a motor dealer.
It's a mess.
In the case of the car dealers I know who trade in Classics they always drive around in their stock to find out if they have any issues as many have stood for months or years - fine for the tax exempt stuff but very hard to do now for the more modern classics.
Plod will take a dim view of you "test driving" it home but it makes sense to test drive a car whilst going about your business rather than going for random drives costing you time and fuel.
In the case of the car dealers I know who trade in Classics they always drive around in their stock to find out if they have any issues as many have stood for months or years - fine for the tax exempt stuff but very hard to do now for the more modern classics.
Plod will take a dim view of you "test driving" it home but it makes sense to test drive a car whilst going about your business rather than going for random drives costing you time and fuel.
TooMany2cvs said:
It's not a very hard concept.
https://www.gov.uk/calculate-tax-on-company-cars
A quick glance at that page and all I can see is the kind of thing that relates to employers providing cars for others ;https://www.gov.uk/calculate-tax-on-company-cars
" As an employer, if you provide company cars or fuel for your employees’ private use, you’ll need to work out the taxable value so you can report this to HM Revenue and Customs (HMRC). "
A genuine question for those who know - what income tax on the benefit-in-kind would a self employed sole trader in the motor trade be liable to pay per month on say a sub-£1000 trade in vehicle that he is using for personal use ?
Fidd said:
a self employed sole trader
If we're talking self-employed, then there's absolutely no separation between the business's assets and finances and the individuals. They are the same entity. So BiK on your "company car" "perk" is not an issue. You're using your own money to buy the car, your own money to fill the car, and you receive the money when you sell the car. If you do business mileage, you can set a mileage allowance for the use of your own car against the money you make when it comes to tax.But if there's a limited company involved, even if the sole employee and director of the limited company is you, then it very much applies.
TooMany2cvs said:
If we're talking self-employed, then there's absolutely no separation between the business's assets and finances and the individuals. They are the same entity. So BiK on your "company car" "perk" is not an issue.
But if there's a limited company involved, even if the sole employee and director of the limited company is you, then it very much applies.
Ok thanks for the clarification.But if there's a limited company involved, even if the sole employee and director of the limited company is you, then it very much applies.
tjob said:
Was this an oversight by the DVLA? It's not just me who takes stock home at night, most independent car dealers usually take what ever is dirty home for the weekend, and now in theory we can't.
What are others doing?
Not an oversight - more like a deliberate part of the new scheme. Like it or not DVLA don't give a fig about sole motor traders and small dealers. The new tax system won't make much difference to private individuals, but like Renovation said it's a mess for the trade, making what is in a lot of cases a difficult and low paid job now just that little bit harder. What are others doing?
The admin involved for the whole 'no vehicle is taxed at change of ownership' concept has got to be huge - all the refunds, all the re-taxing etc. To say the purpose of it all is to save £millions on not having to issue paper discs sounds a little misleading to me ?
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