Im thinking of leasing/financing a vehicle through my company (ltd.) and been looking at a ranger wildtrak double cab. My accountant says it will be declared as a company car and taxed accordingly. Is it not the case that its a Light Commercial Vehicle and if I dont use it for personal use I dont have to pay any Benefit In Kind etc? Cant find much online about it thats definitive, just wondered if anyone has any experience on the subject?

 

A commercial vehicle used only for business purposes has no BiK. For pick-ups, I think they still need to have a 1-tonne payload to avoid being classed as a car.

Occasional incidental private use doesn't incur BiK, but that is not specifically defined beyond saying you could take a mattress to the dump, but going to Tesco every week is out.

If you own the company and take the truck home you may not be able to claim business-use only. If they then assess you for BiK you will pay as owner of the co (NI on the BIK) and as the employee.

 

providing its a commercial vehicle, then firstly, you should be able to claim capital allowances against your companies accounts, so you will gain there iirc you can claim 40% in the accounting year of purchase & then 25% thereafter on a reducing balance.

a commercial vehicle is usually classed as plant & machinery, so your best bet is to check out the guidance in the capital allowances manual link here:


http://www.hmrc.gov.uk/manuals/camanual/CA23100.htm


if its classed as a car see the guidance here:


http://www.hmrc.gov.uk/manuals/camanual/CA23500.htm


with reference to whether or not you are to be charged the relevant BIK (asset provided by the company to the employee or director),if classed as a van see here:


http://www.hmrc.gov.uk/paye/exb/a-z/v/vans.htm


i refer you to the section in the above link titles Vans used for ordinary commuting and insignificant other private use.


I think what you need to first is find out what a double cab pick up is defined as, is it a 'van' or is it classed as a 'car' for that see here:


http://www.hmrc.gov.uk/vat/sectors/motors/what-is-car.htm

quoted from the above link, i have bold texted the relevany points:

Cars

In most cases, VAT-registered businesses can't reclaim the VAT when they buy a car.





VAT rules say that a car is any motor vehicle of a kind normally used on public roads. It must have three or more wheels and meet one of the following conditions:

• It must be constructed - or adapted - mainly for carrying passengers.
• It must have roofed accommodation behind the driver's seat. This must either be fitted with side windows already or be constructed - or adapted - so that side windows can be fitted.

In addition, the following are not cars for VAT purposes:

• vehicles capable of accommodating only one person or suitable for carrying twelve or more people including the driver
• caravans, ambulances and prison vans
• vehicles of three tonnes or more unladen weight
• special purpose vehicles, such as ice cream vans, mobile shops, hearses, bullion vans, and breakdown and recovery vehicles
• vehicles with a payload of one tonne or more

so if the 'double cab' design of what you looking at has 'roofed accomodation behind the drivers seat' and 'This must either be fitted with side windows already or be constructed - or adapted - so that side windows can be fitted'

then for tax purposes it will be classed as a car and taxed accordingly as a benefit in kind. it wont be classed as a 'van' and be tax exempt for tax purposes due to 'incidental use'

id say your accountant is correct, if by definition its classed as a car as above. Unless as Iain said the payload (presumably of the open back) is a tonne or more

 

Its payload is afely over the 1 tonne so qualifies as a commercial, which brings the VAT advantages and potential accounting advantages.

http://www.ford.co.uk/Cars/Ranger/Utility

Only question relating to BiK is the use you will make of the vehicle. If it is only business and getting there and back you are fine. If you want to use it as a family car, take it on holiday, etc, you should pay BiK.

 

Done this on a l200 a few years back with my ltd company and had no problems but did use it just for work. In the end just went back to a van found the pickup a bit of a pain for carrying tools ect and not a lot of room inside.

 

I think she has her wires crossed then cos she asked me if the payload was more than 1 tonne or 3 tonne. I told her it was 1072kg and she said that it wold be classed as a car?

 

1 Tonne = 1000KG

so at 1072KG, its 1.07 tonnes, therefore as Iain said its over the 1 tonne limit to be classed as a car and would be classed as a commercial vehicle.

 

That all makes sense Iain, thanks. I live in west Yorkshire, I rent a flat in London for work. I'd be driving the truck to work Mon, using it all week between sites then back home of a weekend. Do you think that would be a fair call on business use only or would they class it been on my drive for a few weekends a month as personal use?

 

I've got an L200 as a company vehicle and it cost me around £50 a month.

 

The only way to be certain on the use you propose is to write to your tax office and get their decision in writing.

In your case, if London is where you do your work but you choose to live elsewhere (and who could blame you?), I suspect they would consider the journey to be personal.

 

^^^^

Yep,

A regular journey of that magnitute would be considered private use which, i would imagine be considered more than 'merely incidental' to the business use

A BIK charge is based on the principle of the asset being 'made available for private use' by the employee/director or the employees/directors spouse/family, not if there has been any actual private use

EG:

A company gives an employee/director a company car, the employee is then seconded to America & the car remains on the employees drive. Obviously the employee doesn't use the car as he/she is in another country. But the employees wife/husband uses it.
the fact that the employee/director has not used it is irrelevant, as the company has made the vehicle 'available' for private use and any BIK charge is applicable on the employee/director.

If it is made available for private use then i would imagine you would incur the charge.
The Caveat on that would be whether or not the pickup is classed as a Van (rather than a car as the payload is more than 1 tonne) and the usage concerning a van applies (or not as the case may be)

I would ring 0845 300 0627 and ask to speak to a Technicial advisor and find out.