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104T28 View Drop Down
Groupie
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Points: 332 		Post Options Post Options   Thanks (0) Thanks(0)   Quote 104T28 Quote  Post ReplyReply Direct Link To This Post Posted: 24 Feb 10 at 17:09
 
Also had it confirmed today from my accountant 100% tax allowance in the first year but definately only on commercials which is normally classified as anything with VAT on it. So includes double cabs, car derived vans, panel vans and mini buses.
As has been mentioned, you don't have to use the whole 100% if it isn't advantageous in that year.
Basically good news for me as I need to get our tax down in this year, not worried about the next few years as they'll probably be awful anyway!
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Points: 96 		Post Options Post Options   Thanks (0) Thanks(0)   Quote simmytt Quote  Post ReplyReply Direct Link To This Post Posted: 24 Feb 10 at 18:57
As i think i started this ball rolling on another thread,i phoned my accountant again today to confirm what she told me last week about the 100% thing,one thing she did say to me was the van must be 100% work useage and dont sell it within 12 months.
Only dead fish go with the flow
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Points: 364 		Post Options Post Options   Thanks (0) Thanks(0)   Quote starsKEY Quote  Post ReplyReply Direct Link To This Post Posted: 24 Feb 10 at 19:02
So if its 100% work surely you don't need to pay P11D? 

Complex this tax business....
Its not Aircooled, It's Airconditioned.
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Points: 645 		Post Options Post Options   Thanks (0) Thanks(0)   Quote triple Quote  Post ReplyReply Direct Link To This Post Posted: 24 Feb 10 at 19:46

Great thread all this free info.

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Originally posted by starsKEY starsKEY wrote:

Complex this tax business....


Thank goodness Wink
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Points: 1218 		Post Options Post Options   Thanks (0) Thanks(0)   Quote blackvanman Quote  Post ReplyReply Direct Link To This Post Posted: 24 Feb 10 at 19:53
100% work usage? mine is personal aswell with p11d and i got 100% tax allowance last financial year
'09' 174 kombi, swb, pearl black
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starsKEY View Drop Down
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Points: 364 		Post Options Post Options   Thanks (0) Thanks(0)   Quote starsKEY Quote  Post ReplyReply Direct Link To This Post Posted: 24 Feb 10 at 19:54
Spot the accountant?! Or is it simply 'accounting'. Nothing closer to my heart as a consultancy type business as being tax efficient. 

I'm just diligent that I'm paying 'them' enough you see, especially as they seem to need the money at the minute ;-).......
Its not Aircooled, It's Airconditioned.
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Points: 288 		Post Options Post Options   Thanks (0) Thanks(0)   Quote TwoFish Quote  Post ReplyReply Direct Link To This Post Posted: 24 Feb 10 at 20:12
Going off topic a bit, it's quite bizarre just how many 'rules and regs' issues surround the whole 'seats and windows in the back' thing. Off the top of my head, I can think of:

Insurance issues
Registration and (VED) tax class
RTA / RTRA speed limit for 'goods vehicles'
For businesses:
  VAT position
  Capital allowances
For employees
  Private use benefit-in-kind issues (van benefit vs private car benefit)
Ferry fares and road tolls
Safety regs?

[Edit] Oh and we nearly had the London Low Emissions Zone rules as well, fortunately kicked into touched by Boris.


Edited by TwoFish - 24 Feb 10 at 20:16
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starsKEY View Drop Down
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And thats not to mention:

Seeing out/Seeing in
Vermin seeing whats in the back and subsequently trying to pull it out
Seeing whats going on in the back ;-)
Overnight parking V's overnight camping
Kipping in Tesco's car parks (for example)
Its not Aircooled, It's Airconditioned.
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Points: 1304 		Post Options Post Options   Thanks (0) Thanks(0)   Quote Kev The Gas Quote  Post ReplyReply Direct Link To This Post Posted: 24 Feb 10 at 20:42
[QUOTE=starsKEY]And thats not to mention:

Seeing out/Seeing in !
Vermin seeing whats in the back and subsequently trying to pull it out  !
Seeing whats going on in the back ;-) !
Overnight parking V's overnight camping !
Kipping in Tesco's car parks (for example)

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starsKEY View Drop Down
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Points: 364 		Post Options Post Options   Thanks (0) Thanks(0)   Quote starsKEY Quote  Post ReplyReply Direct Link To This Post Posted: 24 Feb 10 at 21:35
Is that a case FOR windows then? I'm unsure of the protocol ;-)
Its not Aircooled, It's Airconditioned.
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Originally posted by starsKEY starsKEY wrote:

So if its 100% work surely you don't need to pay P11D? 

Complex this tax business....
 
 many moons ago, when i first became registered for VAT, it was explained by the VAT man that vans were classed as commercial vehicles period. it didn't matter if you used it to pop down Tesco's or to visit a friend or go on holiday Wink, as far as the tax man was concerned it was a commercial and could not be a private vehicle. therefore 100% fuel claimable, no milage charts or allowances. easy.
 that'll be a straght forward panel van BTW
 
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Points: 364 		Post Options Post Options   Thanks (0) Thanks(0)   Quote starsKEY Quote  Post ReplyReply Direct Link To This Post Posted: 24 Feb 10 at 22:03
Smidsy I'm with you. 

I pay my P11D, its a panel van and I'm proud to say I go on holiday in it. Every year. Lots. Use it on a weekend, nip down the shops (loading bays are free parking and always handy) pimp it around the place. That and its easier to fit all my kit in and sleep as well!  

If HMCE want my £3k B.I.K contributions, then I'll make sure I'm getting the effing benefit! However, my point was that if you pay P11D for private use of a vehicle (amongst other things) then 100% commercial use seems a strange requirement (aware this is advice from an accountant as opposed to HMCE also...)

Point to note. HMCE are, for their sins VERY helpful, if you want something clarifying phone them up! You pay them. Obviously don't reveal too much but in these cases I'd always ask them. They usually want to know who you are but for the most part I don't imagine any of us are talking about tax evasion here, simply tax efficiency. So you've nothing to loose from calling them, also works both ways, if they ask you for a number (i.e VAT or Ref no) and they advise you, they will always in turn give you a reference number. It wont mean if they're wrong you wont have to stump up any extra cash, but it will prove you acted on their advice and as such they couldn't (ethically) pursue beyond any adjustments. I know this is very conformist, but with some educated background reading you should never ask a really bad question ;-)
Its not Aircooled, It's Airconditioned.
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Points: 213 		Post Options Post Options   Thanks (0) Thanks(0)   Quote BERTYBUS Quote  Post ReplyReply Direct Link To This Post Posted: 24 Feb 10 at 22:56
mmmm.....my accountant told me about 3 month into business not to talk to hmrc/vat man ever again. i haven't and have had no need to since. when i first left my job they were forever sending letters out demanding i ring them within a certain time about certain things. to be fair i agree with starskey that they were always helpful, but he pointed out that the truth from a tax numpty like me and the correctly worded answer from an accountant aren't necessarily the same thing. that was 3 year ago.
 
btw my sportline is 100% business use....honest...defo...
Its not all glamour
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First-Year Allowances

In certain circumstances, you can also claim First-Year Allowances of 100 per cent in the year your company or organisation makes the purchase of certain plant or machinery. This means you can deduct the whole purchase cost of the asset from your company or organisation’s trading profit in the accounting period when it was purchased. Examples of expenditure that may qualify for 100 per cent First-Year Allowances include:

  • low carbon dioxide emission cars
  • energy-saving plant and machinery
  • environmentally beneficial plant and machinery
  • equipment for refuelling vehicles with natural gas, biogas or hydrogen fuel
  • North Sea oil ring-fence plant and machinery and mineral extraction.
In addition to the 100 per cent First-Year Allowances, there is a new temporary 40 per cent First-year Allowance for expenditure on most plant or machinery (other than cars) incurred in the year 2009-2010, that is, between 1 April 2009 and 31 March 2010, in the case of companies
A van bought after 1/4/09 for 20k [plus vat] can be claimed against tax for 8k the first year then 20% of 12k then 20%9600 as i read it.So if you pay 40% tax after 3 years the van costs £ 15,082
About 10k more than its trade in value .
12 T30 140 LWB 4 MOTION
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Points: 288 		Post Options Post Options   Thanks (0) Thanks(0)   Quote TwoFish Quote  Post ReplyReply Direct Link To This Post Posted: 24 Feb 10 at 23:11
starskey, IMHO, that's a very good analysis.

Of the 100% use thing (as regards capital allowances), I admit I'm going from dim memory of when I used to deal with this stuff years ago, and I've now chugged down a good volume of whisky, but I thought the way it worked was that if you used an asset (van) for (say) 90% business purposes, then you claimed 90% of the capital allowances for it

On the (employee's) benefits in kind side, Yes, if an empoyee makes any 'significant' private use of a van, then they're liable for the tax on the £3,000 benefit in kind. Maybe that's where the 100% use advice stems from.

As to HMRC being helpful, I entirely agree. Whilst they're (organisationally) found wanting on complex international tax issues and dealing with large/complex business issues, for 'normal' UK business and personal taxation issues, if you can penetrate the switchboard, they can be great (and free). If your enquiry is genuine, you're not involved in anything 'dodgy', and you're being open, honest and polite, HMRC staff are generally really helpful.

Put yourself in their shoes. They're treated dreadfully, their systems are crap, and they spend much of their time dealing with angry people. If you deal with them respectfully and honestly, chances are they'll do likewise, and may relish being respected as someone who actually is probably reasonably bright and actually serves a useful and important role. They don't make tax law / policy, they just have to sweep up after the politicians that do.


Edited by TwoFish - 24 Feb 10 at 23:18
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Right - this could take a while!

I've been looking at caravelle/shuttles with a view to purchasing one for my business. Now, having a past in financial advising i don't mind a bit of late night in depth trawling of the forums and advice boards to clarify what the tax/hmrc position is and also because a bit like that (ie rather know all the facts myself, rather than trust people that maybe are just flannelingWink). Now with that said, i am not an accountant so feel free to correct, contest or advise on any of the following.

If LTD - there are two ways to own the vehicle, privately or company(ie company car)

There are two tax implications. THE PURCHASE ROUTE AND THE COST OF OWNERSHIP

If you own the CAR privately you can basically claim business mile at 40p (10000miles) 25p (above 10000miles) this is the allowance rates set out by hmrc these rates inc depreciation, fuel and other costs. Note though that your other costs tax ins etc you'll have to swallow.

If the company owns the car and there is a element of private use you (the company car user) will be liable to a BIK (benefit in kind) charge. This is worked out on the list price of the vehicle and the co2. ANYTHING OVER £12000 IS CLASSED AS AN EXPENSIVE CAR. On a new caravelle this was roughly £1900 a year (income tax). of course the caravelle is a pricey vehicle so they are trying to encourage cheaper/greener cars. Please note when BIK are worked out it goes on the list price of the car when new, even if you have bought the car second hand. Go figure!

Purchasing. If on contract hire or lease the company can normally allow as an expense the whole monthly payment plus 50% of the VAT (if registered) plus the other usual running costs. However if the vehicle is worth over £12000 then a calculation is made and some of the monthly payments are disallowable (the caravelle 30% was disallowable). Contact hir is good because the vehicle is not showing on the balance sheet and the residual value risk is not with you.

You can designate the car as a pool car and avoid a lot of the above BIK etc. but it strictly does have to be a pool car with NO private use.

VANS, (this includes, i am told kombi, shuttles etc) vans are treated differently, for use that includes private use the income tax charge  is (£3000)at 22% of £660yr, but if totally business use their is no charge and unlike CARS this can include from home to your place of work.

If you are claiming no private use, precise records of your journeys should be kept.

Both company car and van users can also have to pay fuel benefit tax if they have the benefit of company paid fuel for private use.

CAPITAL ALLOWANCES
The original poster is correct, a new AIA (annaul investment allowance) was introduced in APR 08/09 for ltd and st/part. The allowance is £50000 a yr and any capital expediture can be set against this. The good thing is VANS are allowed against the AIA so spend £20000 on a van and claim 100% of the expense against your profits, of course if you sell it later for £10000 there will be a balancing charge ie £10000 back on your profits, you do not have to claim the full 100% straight away, so depending on your profits spread it out a little.
Its pretty tragic for CARS, cars are not allowed against the AIA and cars over £12000 go into the single asset pool, these are only allowed to be set against profits at the rate of 10% a year with a maximum of £3000 a year, so the writing down is slow. Although if you sell a £30000 vehicle after 3 years for £15000 you'll receive a balancing charge in your favour.


If Sole Trader/Partnership you will always own the car yourself so a lot of the above does not apply, you can still claim all the usual running costs either in the add them up way or the 40p/25p method, and the capital allowances.

What this all means, and what is the best route i am still not sure- i have not crunched the figures, the benefits of being ltd i'm sure are degrading by the year (but thats just a hunch), i am seeing the accountant tomorrow and am hoping he knows more than i doBig smile.

As a side note, i was looking at the second hand market but a lot of 05/06/o7 caravelles/shuttles 2.5ltr are falling into the £400+ road tax bracket (another mess of a system) and i noticed VW were contract hiring new caravelles at 349+vat most other leasing sites have them at £480+vat, so i thought this was viable especially with £295 for 3 yr servicing and the 3yr warranty to back you up. Any thoughts?
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What's a company 'car'? ;-)
Its not Aircooled, It's Airconditioned.
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Just to Add, if you are using the 40p/25p claim method then the capital allowance claim that covers depriciation is built into the 40p/25p rate so cannot be claimed again.

Plus, i am advised that kombi's and shuttles are classed as commercials as the VAT is fully recoverable. I know they are registered as cars on the log book (most of the time), so i am not certain on which indicator the hmrc uses to determine this.
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Points: 191 		Post Options Post Options   Thanks (0) Thanks(0)   Quote cjm_2008 Quote  Post ReplyReply Direct Link To This Post Posted: 25 Feb 10 at 11:35
interesting thread this.

I'm told that once I pass 2 years ot the same site, I can no longer claim travel expenses from my company. since I'm racking up 100 miles per day, this is a serious chunk I'll be missing out on (average £600 p\m).

so I'm planning to go down the company vehicle route (i run a LTD co). the issue is, can I sell my van - which is currently a personal vehicle - to the company? or should I part-ex it against a newer model from a dealer so there's a proper paper trail? I will be using it for personal use as well as business.
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