Company car?
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Discussion

manek

Original Poster:

2,978 posts

315 months

Friday 11th April 2003
quotequote all
I guess I need to talk to my accountabnt about this but just to tap the collective wisdom of PHers -- as mentioned in a thread not far from here, I'm about to launch a company (just need a name -- suggestions welcome!).

There is no earthly way to make a company car an attractive proposition these days is there? It's gotta be my own and claim mileage or I'm taxed to hell and back?

S2N

6,314 posts

286 months

Friday 11th April 2003
quotequote all
you got it

manek

Original Poster:

2,978 posts

315 months

Friday 11th April 2003
quotequote all

jinx said: Some info.....

www.inlandrevenue.gov.uk/capital_allowances/cars.htm

www.inlandrevenue.gov.uk/company_vans_info.htm

and
www.inlandrevenue.gov.uk/cars/


Thanks -- already been there, and on some small business Web sites. Just triple-checking here in case there was some tiny tiny loophole I might have overlooked.

> Edited to make slightly more sense...

>> Edited by manek on Friday 11th April 12:01

rob.ellis

2,863 posts

309 months

Friday 11th April 2003
quotequote all
If your vehicle is classed as a "commercial" then its a flat 200 pa tax bill i think.

Also, if you do go the company car route, the something like an elise makes good sense as it has a tiny c02 output.

cheers
Rob

manek

Original Poster:

2,978 posts

315 months

Friday 11th April 2003
quotequote all
Trouble is, all the cars I like the look of have HUGE CO2 outputs...

donatien

1,113 posts

289 months

Friday 11th April 2003
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You could buy a van. I looked at this as an option recently as I didn't want to sell the Griff to my company as an asset.

Vans attract something like £500 per year as a benefit. Until that fat scottish bloke cottons on and closes that loophole.

www.inlandrevenue.gov.uk/pdfs/emp2001/ir136.htm


>> Edited by donatien on Friday 11th April 13:58

simonrockman

7,136 posts

286 months

Friday 11th April 2003
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A pick-up is a commercial, so that's almost no tax and there is an exception for motoring magazines. A loophole I once tried to exploit and failed.

eric mc

125,917 posts

296 months

Friday 11th April 2003
quotequote all
If you operate as a sole trader, rather than a Ltd Co, then none of the company car regulations apply. The same applies to partnerships.

If you are operating as a Ltd Co AND you own the car personally, you can personally claim mileage from the company at the set mileage rates.The company claims these "mileage claim" payments made to you as Motor and Travel costs and therefore can have them deducted against trhe Corporation Tax profits. The money you receive from the company is tax free in your hands.THe main provisos are that you cannot exceed the standard rates and that the mileage is only claimed for business journeys. Also, the company should not pay any of the normal running costs of the vehicle. The company (if VAT registered) can claim back the Input VAT on the petrol element of the standard mileage claim rates.

donatien

1,113 posts

289 months

Friday 11th April 2003
quotequote all

eric mc said:The company (if VAT registered) can claim back the Input VAT on the petrol element of the standard mileage claim rates.


Are you sure on that Eric? I claim 40p per mile tax free out of my company for business use of my Griff, but I wasn't aware the company could reclaim the VAT (I'm registered BTW).

How would it work? Say 10,000 business miles a year. Do you have to use published/agreed figures for mpg?

Say optimistically the Griff does 20mpg or so that would be 500 gallons/annum or around £1800. The VAT element of that is around £250, so certainly worth reclaiming.

Dave

eric mc

125,917 posts

296 months

Friday 11th April 2003
quotequote all
I shall quote from Tolley's 2002/03 Tax Guide - "The employer can reclaim Input VAT on the FUEL element (providing he has detailed records to support the claim) but not on the part of the allowance which relates to repais, insurance, depreciation etc". What is never quoted is the actual fraction of the pence per mile amount which is taken to be the fuel element. That is up to each claimant to decide.

Maybe contacting the AA might provide a breakdown of the 40p/25p per mile amounts as they come from AA sources originally.

To be honest - most of my clients do not bother claiming back the Input VAT fuel element.

stc_bennett

5,253 posts

298 months

Friday 11th April 2003
quotequote all
I also run my own business, and was thinking of buying a vehicle for lugging stuff around. would a landy defender be classified as a Van in this case???

Was thinking of buying a 110 Double Cab for business and family use

Steve

eric mc

125,917 posts

296 months

Friday 11th April 2003
quotequote all
Landrover Defender = "Car" I'm afraid. The Inland Revenue do not specify very clearly what they mean by "Car" rather than "Commercial Vehicle". The VAT rgulations are much more specific.

Basically, any vehicle normally construed to be a car, is a car. Vehicles designed as buses, lorries, vans, pick-ups, taxis (black cabs mainly)JCBs etc are commercial vehicles. In fact, the Inland Revenue lump all commercial vehicles into a very general "Plant and Machinery" heading.

stc_bennett

5,253 posts

298 months

Friday 11th April 2003
quotequote all
Damn, i thought as they can be used for farm use they can also be used for business use. I have seen some adverts for some defenders as commercial +VAT just wondered. i am sure there was a member on here that had a defender as a commercial vehicle.

well it looks like i am stuck with a boring van. Which Van would be the choice of the people of PH???

manek

Original Poster:

2,978 posts

315 months

Friday 11th April 2003
quotequote all
As for the fuel element, how would you work this out if you go for the new flat-rate VAT? In this case, you never know how much VAT you've paid since it's deeemed to be a certain percentage of your revenues depending on your industry.

Aprisa

1,898 posts

289 months

Friday 11th April 2003
quotequote all
I'm ready to be shot down on this but I was sure that a 110 double cab is classed as commercial due to the body being a pickup and able to carry over one ton? The same classification as my Navarah.
110 or 90 with no windows to the rear would also be classed as a van, same as Discovery commercial.
IMHO Nick

davidy

4,492 posts

315 months

Friday 11th April 2003
quotequote all
stc bennet

I was under the impression that the Defender in certain body forms was regarded by the IR as a commercial vehicle.

My defender (:shamelessplug: for sale at the moment :unshamelessplug was a 'Commercial Vehicle' when I bought it, ie xx,xxx+VAT and the dealer who sold it to me indicated that I could run it on my business as a commercial vehicle paying the IR a fixed amount rather than normal emissions based company car tax (and calm the VAT element. (I, at the time, opted to take it personally and therefore it is effectively removed from the VAT system).

There was another Defender for sale on PH a few months ago where someone had just done that, run a 90 Van style Defender as a company commercial vehicle.

I believe that simple seat configuration County Station Wagons are classed as 'cars' however other body configurations (including 110 12 seater) are commercial. No doubt an IR inspector may (try to) prove you wrong as this current double cab loophole is being looked into (there were some other threads on this).

If you want a Defender, then I would run it by your accountant

davidy

>> Edited by davidy on Friday 11th April 16:54

eric mc

125,917 posts

296 months

Friday 11th April 2003
quotequote all
Davidy - that's exactly what I was saying. In "normal" configuration a Defender would be looked on as a car. If it has been suitably modified as a van, then it can be treated as a commercial vehicle. I also said that the Inland Revenue's distinctions between commercial and non-commercial vehicles are not that clear cut, purposefully so. There are certain types of vehicles (like Defenders and certain pick-ups) which can inhabit a "limbo land".

There is nothing to stop an individual or business claimimg a vehicle as "Commercial" if they want. However, if picked up by an Inspector of Taxes in an enquiry, you will have to justify why you thought the vehicle was "Commercial" rather than a Motor Car".

The VAT rules give much more detail in their regulations when describing a "Van". They specify number of seats, number of windows, cargo carrying floor space etc. In many ways I wish the Inland Revenue would adopt HM C&E rules as it would clear up a lot of the confusion.