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tax efficient commercial vehicle (van) purchase?

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    tax efficient commercial vehicle (van) purchase?

    Yes - I have an accountant, but find it useful to ask him to implement, rather than advise.

    I wish to purchase a new van for business use.

    I have a separate vehicle for non business use.

    I may retire from contracting in 2 years time and would want to retain the van for private use and convert it to a motorhome.

    New van - can I reclaim vat?

    Accessories? e.g. towball, partial windows?, ply lining?

    Corporation tax?

    Depreciation?

    Directors loan?

    Actions on closing company in relation to the van?

    Your advice and suggestions welcome.

    John

    #2
    This maybe one of those times when it might be better to use your accountant to advise you.
    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
    - Voltaire/Benjamin Franklin/Anne Frank...

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      #3
      Originally posted by John Lane View Post
      Yes - I have an accountant, but find it useful to ask him to implement, rather than advise.

      Your advice and suggestions welcome.
      Change the way you use your accountant.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

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        #4
        Originally posted by John Lane View Post
        Yes - I have an accountant, but find it useful to ask him to implement, rather than advise.

        I wish to purchase a new van for business use.

        I have a separate vehicle for non business use.

        I may retire from contracting in 2 years time and would want to retain the van for private use and convert it to a motorhome.

        New van - can I reclaim vat?

        Accessories? e.g. towball, partial windows?, ply lining?

        Corporation tax?

        Depreciation?

        Directors loan?

        Actions on closing company in relation to the van?

        Your advice and suggestions welcome.

        John
        If you ask your accountant to only process things for you, he is actually acting as your book keeper or perhaps he is not an accountant. If he is not able to answer your questions you may want to search for a qualified chartered accountant to help you with giving you more relevant advice considering you plan to close your company in the near future. I can answer all of your questions above which I have covered in both through my qualification and in practice but the answer will be very complex and likely to open more questions for you so it is may be better to first discuss with your accountant.

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          #5
          Sorry - I have clearly skewed the replies based on my comments about accountants - I chose a 'cheaper accountant' and he struggled with 'Inside IR35 via LTD' --- but the accountant bit is a red herring for me. Let me try and put some flesh on it.

          New van purchased including vat £25K - reclaim vat of £5K - all through company bank account.

          Reduce corporation tax in year of purchase - not sure how much that is - understand you need to use capital allowance claim.

          Use van for business use only and claim mileage where appropriate - no BIK?

          Van depreciates to 33% of original value over 3 years = £6.6K

          In third year sell van to director - not sure whether director loan applicable? - pay VAT and corporation tax and vat on £6.6K

          Close company.

          Please advise.

          Comment


            #6
            Originally posted by John Lane View Post
            Sorry - I have clearly skewed the replies based on my comments about accountants - I chose a 'cheaper accountant' and he struggled with 'Inside IR35 via LTD'

            Please advise.
            Consider a new accountant?
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              Perhaps you can understand reluctance of some accountants to comment here. They may well charge higher than your current accountant, but that's because they/their staff have lots of qualifications/experience so they can answer these kinds of questions. Cheeky to pay a cheap as chips accountants who can just do processing then expect others to answer your queries for free.

              My initial thoughts - why do you need a van for contracting? Do you have a lot of kit you need to take with you to clients? If not, seems to me the whole thing is a bit of a sham to try to get tax relief on your future motorhome.

              If you're happy you can justify you need a van, then the first half of your statements are fine. Re the accessories, I don't know what "partial windows" or "ply lining" are, but especially the latter makes it sound like this is basically you trying to get tax relief on half the costs of converting it into your motorhome. Unless you need those for business usage, I wouldn't claim them.

              Depreciation is then largely irrelevant. If in 2 years you come to sell the van to yourself, then the company should sell it at fair market value (which I'd guess for a 2 year old van with probably modest mileage will be more than 33% of its original cost). That amount will be taxable within the company (though basically just meaning you only end up getting tax relief on the reduction in value of the van whilst you own it).

              Comment


                #8
                Originally posted by John Lane View Post
                New van purchased including vat £25K - reclaim vat of £5K - all through company bank account.
                What rate of VAT are you paying on the van to recover £5k on a £25k bill?
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                  #9
                  Originally posted by Maslins View Post
                  Re the accessories, I don't know what "partial windows" or "ply lining" are, but especially the latter makes it sound like this is basically you trying to get tax relief on half the costs of converting it into your motorhome.
                  Partial windows - buying a panel van and putting windows in the van so that when you put seats in the back you can look out.

                  Ply lining - using plywood (make sure it's the right kind!) to board out the van to make a smoother base / side for fixing the rock-n-roll bed to, and the cupboards etc.

                  So not something that your average contracting business would really need at all, but your campervan would like to have.
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                    #10
                    Originally posted by John Lane View Post
                    I wish to purchase a new van for business use.
                    My T4 camper is on eBay for £8995 if you're interested

                    (Actually the listing ran out last night, but it's still for sale)
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