Company Car

[Viktor]

Generally there are few occassions where a company car for a contractor is a good choice.

There are various taxes imposed, a tax charge on the user, the company pays employers NIC, there are restrictions on the capital allowances/lease costs, no VAT can be reclaimed on purchase etc.

Alan

Is this situation the same if you buy a company pick-up, e.g. Ford Ranger? As far as I know pick-ups are actually vans for tax purposes and you can reclaim VAT...

[EqualOpportunities]

Is this situation the same if you buy a company pick-up, e.g. Ford Ranger? As far as I know pick-ups are actually vans for tax purposes and you can reclaim VAT...

I think that you're correct - but I also am under the impression that, whilst VAT will still be reclaimable, these things are soon going to be taxed as cars. One for Darren, methinks...

[tim123]

Is this situation the same if you buy a company pick-up, e.g. Ford Ranger? As far as I know pick-ups are actually vans for tax purposes and you can reclaim VAT...

I presume that this is a 'twin cab' pickup. The rules were changed some years ago so that only 'genuine' pickups counted as vans, and the "it's a car with a flat bit where the boot should be" type, are taxed as cars.

As has been noted, the tax on Vans changes next year so that they are more in line than cars (but IIRC still cheaper).

tim

[Nixon Williams]

Is this situation the same if you buy a company pick-up, e.g. Ford Ranger? As far as I know pick-ups are actually vans for tax purposes and you can reclaim VAT...

Pick ups can be classed as a van and so more beneficial.

To qualify as a van it must be able to carry 1000kg as per the vehicle spec. If it has a cab added to the back, the payload must be at least 1045kg as the extra weight is deemed to be 45kg!

You can reclaim the VAT assuming that you are not on the Flat Rate scheme and all costs associated with the veghicle can be paid by the company.

The tax situation is changing very soon so there will be more tax to pay that at present and with the Green issues being in the news the tax situation may get worse.

I hope this helps, a few of our clients do operate pickups.

Alan

[Viktor]

Pick ups can be classed as a van and so more beneficial.

You can reclaim the VAT assuming that you are not on the Flat Rate scheme and all costs associated with the veghicle can be paid by the company.

Alan

So if I am on flat rate VAT why I can't reclaim VAT? The pick-up is a capital item above £2000... or am I missing something?

Viktor

[Nixon Williams]

Yes I can confirm that if you are charged VAT then this can be reclaimed even if you are on the Flat Rate Scheme.

Alan

[BoredBloke]

I thought the whole situation on pick-ups was being changed so that they cannot benefit from the £500 falt fee.

Also, if you are at a site for over 24 months, then you cannot claim the milage thing. So in those cases you are better off having a company car and a low paye wage. A high percentage of feck all is still feck all.

If our government really wanted to cut emissions then they would look again at the company car thing. I would be more than happy to get shut of my 6 year old Mondeo and replace it with a more efficient 2006 version.

[tim123]

I thought the whole situation on pick-ups was being changed so that they cannot benefit from the £500 falt fee.

Also, if you are at a site for over 24 months, then you cannot claim the milage thing. So in those cases you are better off having a company car and a low paye wage. A high percentage of feck all is still feck all.

I don't see how the low wage comes into it (unless your total income, including the value of the car, is low). Unless I misunderstood, the scale charge for fuel is between 2.2K and 5K (depending upon the car). So, even at 22% tax, plus 11% ERNI, one pays between 750 pounds and 1.5K to HMG just for the benefit of someone else putting fule into their car. But that someone else is our own company, so it's still nominally our money.

Whether this is a good deal for an individual, depends upon how many miles they do, not just how much they earn.

If our government really wanted to cut emissions then they would look again at the company car thing. I would be more than happy to get shut of my 6 year old Mondeo and replace it with a more efficient 2006 version.

They have. New cars are based upon emissions, so they are encouraging new buyers to choose sensibly. But it doesn't make environmental sense to encourage owners of older, but still servicable, cars to scrap them and buy new ones. There's an environmental cost to making the car that has to be considered.

tim