Vehicle Minefield

[moreguinness]

Hi All

Im employed by my father on a salary in the family business. He is a sole trader and owns his vehicle privately (saloon car) and claims proportion of costs for running it. He has recently expressed a wish to provide me with a vehicle through the business but is not sure where he stands.

A) what is the situation if i was to lease a vehicle through the business
b) does it need to be a van or is an estate/jeep acceptable as i need more than two seats
c)I will need to use the vehicle for some social/domestic trips but it will be used mostly for travelling for supplies and meetings but will be kept at my residence overnight

thanks in advance for any assistance offered

[David Griffiths]

Your position as an employee will be completely different from your father's as a sole trader. You will be taxed on the vehicle as a benefit in kind, depending on the type of vehicle.

If it is a car, an estate car or anything similar, then the tax charge is based on the original list of the vehicle (when new) multiplied by a percentage derived from the CO2 emissions of the vehicle. Then there is an additional charge if you are provided with fuel for your private use - that's generally so high as to not be worthwhile.

The amount of business use is irrelevant as is the amount of private use. If the business pays for it, it doesn't matter if it's leased, bought or on HP


There is a different basis for vans and some commercials, which are defined as having a payload of more than one tonne. There are some double cab pickups in this category which are fitted out more as private cars than as vans. There is a fixed benefit in kind for these of £3,000 plus a further £500 for fuel. If you have one of these and use it basically home to work and negligible private use, then there is no benefit in kind but it seems as if you are going to have more private use than that)

Moving away from tax, these pickups are sprung to match their load carrying capacity and are not the most comfortable things to drive. A client of mine was distracted by the tax position and bought one - he hated it so much that he got rid of it in a few months.