Commercial vehicles

[DiscoStu]

Out of curiosity, what denotes a commercial vehicle as opposed to a car? Had a quick look on HMRC's website and I could only see reference to vans.

Edit: Clearly I wasn't looking hard enough

[Jessica@WhiteFieldTax]

** snip **

As I understand it, I can take a company car. The business buys and maintains it, with the associated reclaim of vat
** snip**

Just to clarify you are unlikely to be able to reclaim the vat on car purchase - the circumstances for that are very limited.

You could reclaim vat on leasing costs and running costs other than fuel, and fuel if you pay the vat scale charge for private use.

On a commercial vehicle you can usually claim the vat on the purchase as well, so long as it is new or sold used with a vat invoice.

[ContrataxLtd]

HMRC linky for VANS:HM Revenue & Customs: Vans - company vans (including fuel)

The BIK has gone up to £3,090 for 2014/15 onwards and the fuel BIK is an additional £581 but this is often worth doing if you put in a lot of mileage personally.

Martin
Contratax Ltd

[TheFaQQer]

IIRC, SockPuppet bought a 4x4 as a commercial vehicle, paid the £3k BIK and used it for personal use as well.

Might be worth pinging him a PM if you are interested in how he got it to work.

[northernladuk]

I don't think it applies to porpoises...

[ChadGates]

as i said, i paid the van tax for duality of porpoise.

[northernladuk]

Didn't we have a thread discussing the issues of claiming a company commercial vehicle when there was absolutely no need for a commercial vehicle. Claiming a van for a bum on seat PM wasn't going to wash... Let me see if I can find it...

EDIT : Ah found it and I am wrong, oddly as I was in the original post..

Here it is..

http://forums.contractoruk.com/accou...4-mo-rule.html

Lots of threads about commercial vehicles so have a dig through this lot and see if anything is useful...

https://www.google.co.uk/search?q=co...ss&safe=active

Reading through some of them and the response to my question in the first thread this statement needs a re-think it seems. The fact a company car sits on your drive means there is a duality of purpose I believe.

To have a company car, I do not need to demonstrate that I use it for work, and the BIK assumes that all use is personal (i.e. There is no pro rata of business vs private use).

[ChadGates]

I'm looking at getting a company car. I'm reasonably well versed on how it works and the very good reasons why it generally doesn't make financial sense, however...

As I understand it, I can take a company car. The business buys and maintains it, with the associated reclaim of vat and reduction in CT, but I pay BIK, calculated on book value, emissions etc, and can only claim a reduced value for mileage (as the wear and tear is already incurred my the company). Generally speaking this has no advantage over running a car personally and then claiming the mileage.

To have a company car, I do not need to demonstrate that I use it for work, and the BIK assumes that all use is personal (i.e. There is no pro rata of business vs private use).

Finally, there is no restriction on what vehicle I choose, and it can be wholly in line with what is of most use to me personally: sports car, 4x4, family estate etc.

On the assumption that all of the above is correct (please tell me if it isn't!), my interest is in taking a company car which is a commercial vehicle (e.g. A van). Just like any company car, it's only business requirement is to ferry me, on occasion, to meetings at client locations. The specific design of the vehicle is more a personal choice (I use a vehicle for towing and carrying tools around in my private life), in the same way that I can choose an estate, sports car etc.

So, here is the nub of my question: Commercial vehicles attract a different rate of BIK (marginal rate of tax on a notional £3k a year). Does this more favourable BIK apply, even if the vehicle isn't specifically required for the business (ie I need the use of a car, my own or company provided, in the line of my work, but it does not need to be a van), or is it a case of if it's classed as commercial, then the commercial vehicle BIK rules apply? Additionally, there are also different rules around company fuel on commercial vehicles, would these apply?

Many thanks!

I ran a company "Van" for several years, much to my fellow contractor's amusement. It enabled me to pursue my hobby, with the company picking up the tab. Worked out Just fine.
Because I used the van for personal business, I paid the extra Van tax. Still worthwhile as it had a 5 litre v8 engine....

[ASX]

I'm looking at getting a company car. I'm reasonably well versed on how it works and the very good reasons why it generally doesn't make financial sense, however...

As I understand it, I can take a company car. The business buys and maintains it, with the associated reclaim of vat and reduction in CT, but I pay BIK, calculated on book value, emissions etc, and can only claim a reduced value for mileage (as the wear and tear is already incurred my the company). Generally speaking this has no advantage over running a car personally and then claiming the mileage.

To have a company car, I do not need to demonstrate that I use it for work, and the BIK assumes that all use is personal (i.e. There is no pro rata of business vs private use).

Finally, there is no restriction on what vehicle I choose, and it can be wholly in line with what is of most use to me personally: sports car, 4x4, family estate etc.

On the assumption that all of the above is correct (please tell me if it isn't!), my interest is in taking a company car which is a commercial vehicle (e.g. A van). Just like any company car, it's only business requirement is to ferry me, on occasion, to meetings at client locations. The specific design of the vehicle is more a personal choice (I use a vehicle for towing and carrying tools around in my private life), in the same way that I can choose an estate, sports car etc.

So, here is the nub of my question: Commercial vehicles attract a different rate of BIK (marginal rate of tax on a notional £3k a year). Does this more favourable BIK apply, even if the vehicle isn't specifically required for the business (ie I need the use of a car, my own or company provided, in the line of my work, but it does not need to be a van), or is it a case of if it's classed as commercial, then the commercial vehicle BIK rules apply? Additionally, there are also different rules around company fuel on commercial vehicles, would these apply?

Many thanks!