Buying a van for my business

[RSR Fulfillment (FR & DE)]

I am thinking of spending about 5k on a van for my ltd co. I will only use it for work and it will be parked at the warehouse out of hours. So I am not interested in all the arrangements about vehicles I read about. I am VAT registered so that is the incentive.

I don't want to lease unless it's about 100 per month and I cant find anything decent at those prices.

Does the V5 have to be in the ltd co. name?
Does the insurance have to be set up to insure people in the ltd co?
Can I get it out of the company after 3 years with a value of nothing and gift it to myself?

 

[Scalloway]

Does the V5 have to be in the ltd co. name?

Yes

Does the insurance have to be set up to insure people in the ltd co?

The insurance will need to be in the name of the limited company.

Can I get it out of the company after 3 years with a value of nothing and gift it to myself?

You would be better doing it at market value.

 

[RSR Fulfillment (FR & DE)]

OK thanks.

Why would I be better doing it at market value?

 

[Scalloway]

Because HMRC could think your company is giving you a tax free payment.

 

[chalkie99]

I am thinking of spending about 5k on a van for my ltd co. I will only use it for work and it will be parked at the warehouse out of hours. So I am not interested in all the arrangements about vehicles I read about. I am VAT registered so that is the incentive.

I don't want to lease unless it's about 100 per month and I cant find anything decent at those prices.

Does the V5 have to be in the ltd co. name?
Does the insurance have to be set up to insure people in the ltd co?
Can I get it out of the company after 3 years with a value of nothing and gift it to myself?

Yes



The insurance will need to be in the name of the limited company.



You would be better doing it at market value.

I would disagree with both points 1 and 2.

You should really take professional advice from your accountant rather than ask random strangers on the internet. After all, if you asked the same questions on your local high street you could at least see if the person you asked was a possibly clueless old lady with a shopping trolley
or someone who looked like they were high on drugs - not that I am suggesting for one moment that Scalloway is anything other than a highly reputable poster on this forum . However, I found completely opposite answers when we bought a van for our Ltd.

Get professional paid for advice before you launch into something.

 

[STDFR33]

I would disagree with both points 1 and 2.

You should really take professional advice from your accountant rather than ask random strangers on the internet. After all, if you asked the same questions on your local high street you could at least see if the person you asked was a possibly clueless old lady with a shopping trolley
or someone who looked like they were high on drugs - not that I am suggesting for one moment that Scalloway is anything other than a highly reputable poster on this forum . However, I found completely opposite answers when we bought a van for our Ltd.

Get professional paid for advice before you launch into something.

If you own the van personally, you can only claim business mileage at 45/25ppm from the company (you can actually claim more but it then becomes taxable so very little point in doing so).

Perhaps you could enlighten the forum on the advice you received?

 

[Scalloway]

Avoiding the tax issues of transferring assets from limited companies to contractors

https://www.contractorcalculator.co.uk/tax_issues_transferring_assets_limited_companies.aspx

 

[chalkie99]

If you own the van personally, you can only claim business mileage at 45/25ppm from the company (you can actually claim more but it then becomes taxable so very little point in doing so).

Perhaps you could enlighten the forum on the advice you received?

He doesn't want to own the van personally, he wants to claim the VAT back. As a director of his Ltd. Co. he can buy the van in his own name and put it through the company books (so I believe - that is what we did and had no problem) - Maybe there have been recent changes but that is why I recommend taking professional advice as far too many people jump in with random replies to internet questions, often having not read the question properly.

Also, the V5 shows the registered keeper, not the legal owner.

Further, as far as I know, the insurance can be in the directors name in which case he can retain any NCD he has on an existing vehicle. If this is an additional vehicle than that will not apply.

If the vehicle is sold at a later date then the director, personally, is entitled to the NCD earned which could be a lot better than it being in the Ltd. Co. name.

 

[STDFR33]

He doesn't want to own the van personally, he wants to claim the VAT back. As a director of his Ltd. Co. he can buy the van in his own name and put it through the company books (so I believe - that is what we did and had no problem) - Maybe there have been recent changes but that is why I recommend taking professional advice as far too many people jump in with random replies to internet questions, often having not read the question properly.

Also, the V5 shows the registered keeper, not the legal owner.

Further, as far as I know, the insurance can be in the directors name in which case he can retain any NCD he has on an existing vehicle. If this is an additional vehicle than that will not apply.

If the vehicle is sold at a later date then the director, personally, is entitled to the NCD earned which could be a lot better than it being in the Ltd. Co. name.

It seems that you have been given dud advice.

 

[MyAccountantOnline]

..
Does the V5 have to be in the ltd co. name?
...

No as the V5 shows the registered keeper not the owner.

Do make sure the invoice for the purchase is in the company name though.

..

Does the insurance have to be set up to insure people in the ltd co?

Do you mean as opposed solely for you as the only driver? Generally the company would insure its van for all employees who will be driving it.

..

Can I get it out of the company after 3 years with a value of nothing and gift it to myself?

Yes you can but you pay tax on what's called a benefit in kind. You can avoid this by buying it from the company at its market value.

 

[estwig]

I would disagree with both points 1 and 2.

You should really take professional advice from your accountant rather than ask random strangers on the internet. After all, if you asked the same questions on your local high street you could at least see if the person you asked was a possibly clueless old lady with a shopping trolley
or someone who looked like they were high on drugs - not that I am suggesting for one moment that Scalloway is anything other than a highly reputable poster on this forum . However, I found completely opposite answers when we bought a van for our Ltd.

Get professional paid for advice before you launch into something.

I've taken advice from accountants in the past, who with hindsight, were probably high on drugs and definately clueless.

Just because you take advice, doesn't mean you act on it.

 

[Gordon - Commercial Finance]

I am thinking of spending about 5k on a van for my ltd co.

I don't want to lease unless it's about 100 per month and I cant find anything decent at those prices.

Lease on a £5k asset, presuming you're looking to do it over 3 years is very unlikely to be £100. Not likely to be much residual in it after 3 years so you would be looking at between £150 and £200 a month.
You could probably lease a £10k van for about the same per month than a £5k one in fact.

It has been said before on this forum (I think by @The Byre maybe? Correct me if I'm wrong) that any van costs £10,000. You either spend £10k on it in the first place, or you spend £5k on it up front and then £5k keeping it on the road over the years.

 

[chalkie99]

It seems that you have been given dud advice.

Strange that considering:

1. Neither the accountant nor HMRC have had any problem with it
2. You don't back up your opinion with any reason or evidence
3. You didn't even read the original post properly
4. Your own signature seems to back up my views

 

[chalkie99]

I've taken advice from accountants in the past, who with hindsight, were probably high on drugs and definately clueless.

Just because you take advice, doesn't mean you act on it.

I agree with you but would rather take advice from a professional you can challenge if the advice is wrong than some random on the internet.

How many times do people ask things like "Which is the best ...? (insert subject of choice) only for the thread to fill up with a dozen different opinions ?

 

[Adam93]

A company is a separate legal entity. The invoice is proof of ownership. To reclaim VAT you need a valid VAT invoice which means it must be made out to the VAT registered ‘person’ which is the company.

As for insurance I wouldn’t want to comment.

From a VAT point of view, there will be a supply deemed to occur at market value when you transfer the van out of the company. For direct tax, if transferred at market value, then no issues. If below market value, then benefit-in-kind rules will apply.

With a van only worth 5k it may be worthwhile purchasing it personally and charging business mileage to the company, even if it means you cannot reclaim the VAT - get your accountant to crunch some numbers.