help with a van thats not a van for AIA

[mjb6964]

hi I'm literally about to buy a van this morning £25,000 which I was hoping to include in my AIA in the first year.
Its a VW shuttle but I was going to remove the rear seats. Its exactly the same as the VW transporter but has 3 rows seats and load space instead of 2 rows and load space (such as a typical combi van).

VW class it as commercial but an online check with DVLA tool states its M1 class which I see now as a car. Tax £250.00

Emissions 163....

Im in a dilemma now as I need to purchase it. Is there any argument that is likely to be successful (if ever questioned) that its a van for AIA and tax reasons. Or is it simply a car and has to be written down over the years....?

Im not vat registered at the moment

 

[Alan]

If the construction is not primarily for the transportation of good ( despite the removal of seats) as indicated by the DVLA class, then, in my non qualified position, you would be pushing your luck to call it a van. e.g. https://library.croneri.co.uk/cch_uk/btc/2006-btc-861

 

[mjb6964]

I agree....
so I'm buying a van today for 25k which i intend to use my AIA to offset against 37k earnings. Im a sole trader. Im concerned though that when I become limited in a few months I may fall foul of having done this (used AIA) and be liable to pay something back? is this the case ? advice would be much appreciated

 

[The Byre]

Never fall in love with a piece of business kit, esp. a car or van. That is gear-lust and to be avoided. Make sensible decisions based on realistic expectations.

Why don't you just buy a regular van? Why does it have to have windows?

 

[mjb6964]

needs must to ferry employees occasionally. more concerned with tax implications when i become limited having to sell the van to myself

 

[The Byre]

In which case, ask your accountant what he/she advises.

I would opt for something used and cheap for the time being and see how things pan-out. I really can't believe that you MUST have a brand new van TODAY. There are loads of used Transits out there - just for you!

 

[mjb6964]

In which case, ask your accountant what he/she advises.

I would opt for something used and cheap for the time being and see how things pan-out. I really can't believe that you MUST have a brand new van TODAY. There are loads of used Transits out there - just for you!

Hi thanks for your reply... I think maybe you're missing my point.
Ive been looking for a while and have forecast my profits for the end of my tax year next week. As such I ...
A) i need a new van
B) i need to buy to offset against my taxable profit.

 

[The Byre]

HMRC will see the magic word 'car' written in the margin and disallow any AIA. Why can't you put seats in a van, after you've bought the thing?

But this has to go past your accountant first!

 

[mjb6964]

HMRC will see the magic word 'car' written in the margin and disallow any AIA. Why can't you put seats in a van, after you've bought the thing?

But this has to go past your accountant first!

yes the 'car' idea i have moved on from. Just a van now but that causes an issue see below :
I agree....
so I'm buying a van today for 25k which i intend to use my AIA to offset against 37k earnings. Im a sole trader. Im concerned though that when I become limited in a few months I may fall foul of having done this (used AIA) and be liable to pay something back? is this the case ? advice would be much appreciated

 

[The Byre]

I can't give you an answer because -

1. I am not an accountant.
2. I do not know anything about you or your business.
3. UK tax laws are the most complex on Planet Earth (Tolley's guidelines are 21,000 pages long!) and there will be a thousand things that cannot be taken into account on a forum. Only an accountant who is familiar with you are your business can do this for you.

 

[Stedurham]

Buy the transporter its a van!!! If you want to add seats later its relatively easy

 

[Financial-Modeller]

@mjb6964 You are actually asking many questions here, which should be directed to your accountant, not an internet forum.

You're planning on buying something that doesn't meet HMRC rules, specifically to reduce a tax bill, which might be better reduced in other ways, given that you are also considering incorporating in future!

That type of advice is what your accountant is for.

 

[Stedurham]

My accountant charges guess work here is free lol

 

[DWS]

You will be able to transfer the Van from your sole trader business into a Ltd Co without falling foul of anything or having to pay anything as any good Accountant will be able to advise, but I would still recommend speaking to one before you purchase anything.

 

[Scalloway]

My thought would be that if you sold the van to the limited company HMRC would reclaim the tax you saved by claiming AIA as the van ceased to be an asset of the sole trader business.

 

[DWS]

But what if it was not sold but transferred using a s.266 election?

 

[Chris Ashdown]

You can save money on tax buying a van or transporter but also at the same time expect the item to lose value over time, how much will your £25000 item be worth in two years time or even one year
Paying tax and using a hired van when required may workout a better deal and no insurance or maintanance costs

Do a price check on autotrader to see how much markup the trader is making