Personal loan, van & VAT

[Jamestrade]

Hi everyone,

There are a few posts about personal loans and vans etc, however I haven’t found any that match my situation.

I purchased a van with a personal loan with the full intention of converting it. Fast forward 8 months, my head has been turned toward starting my own business.. in an industry requiring a van.

The personal loan was not taken out with the intention of using the vehicle for business use.

If I was to secure a business loan, could I transfer the monies to myself to repay my personal loan? Then making it the LTD company asset.

Much appreciated in advance.

 

[UK Contractor Accountant]

If I was to secure a business loan, could I transfer the monies to myself to repay my personal loan?

You get a valuation of the van and the company buys the van from you at the agreed market value.

Up to you what you do with the sale money.

 

[MyAccountantOnline]

Hi everyone,

There are a few posts about personal loans and vans etc, however I haven’t found any that match my situation.

I purchased a van with a personal loan with the full intention of converting it. Fast forward 8 months, my head has been turned toward starting my own business.. in an industry requiring a van.

The personal loan was not taken out with the intention of using the vehicle for business use.

If I was to secure a business loan, could I transfer the monies to myself to repay my personal loan? Then making it the LTD company asset.

Much appreciated in advance.

If you have a limited company you can sell your van to the limited company. You'll need to use the market value not the balance owing on your personal loan.

Have you considered the benefit in kind tax charge on a company vehicle?

 

[Jamestrade]

If you have a limited company you can sell your van to the limited company. You'll need to use the market value not the balance owing on your personal loan.

Have you considered the benefit in kind tax charge on a company vehicle?

It would be used strictly for business use if it was to be sold to the company.

Thank you for confirming. Would I be able to claim VAT back from the purchase? When I bought the van originally VAT was paid.

 

[JEREMY HAWKE]

I always think its easier if it part of the company instead all that 44p a mile form /app filling out

 

[MyAccountantOnline]

It would be used strictly for business use if it was to be sold to the company.

Thank you for confirming. Would I be able to claim VAT back from the purchase? When I bought the van originally VAT was paid.

Have a read here regarding benefits in kind

Expenses and benefits: company vans and fuel

Tax and reporting rules for employers providing company vans and fuel

www.gov.uk

and re the VAT - possibly have a read here -

VAT guide (VAT Notice 700)

The guide to VAT rules and procedures.

www.gov.uk

 

[MyAccountantOnline]

I always think its easier if it part of the company instead all that 44p a mile form /app filling out

You've short changed yourself by 1p per mile It's 45ppm for the first 10,000 miles per tax year

 

[Paul Kelly ICHYB]

@Jamestrade The scope of your question has incorporated van finance, benefits in kind, VAT, business loans (on a business that does not yet exist), self employment or limited company and company buying a personal asset!

This shows all of the elements that you need to think of and, possibly, the need to sit down with an accountant to work out the best financial route.

 

[UK Contractor Accountant]

Don't forget with a company van you are allowed to take an old mattress to the dump once or twice a year without triggering the van benefit charge

Bargain that - well worth making a couple of trips to the dump each year.

 

[Paul Kelly ICHYB]

Don't forget with a company van you are allowed to take an old mattress to the dump once or twice a year without triggering the van benefit charge

Ooooeeeeer - Please elaborate.

 

[UK Contractor Accountant]

Insignificant​

14.5

Sections 114 (3A) and 155(3)

The word ‘insignificant’ means ‘too small or unimportant to be worth consideration’. Private use is to be considered insignificant if it’s:

• insignificant in quantity in the tax year as a whole (that’s a few days at most)
• insignificant in quality (for example, a week’s exclusive private use is clearly not insignificant)
• intermittent and irregular
• very much the exception in terms of the pattern of use of that van by that employee (or their family or household) in that tax year

14.6​

Examples of insignificant use are an employee who (using the van):

• takes an old mattress or other rubbish to the tip once or twice a year

 

[DWS]

Not one of my clients who have a Company van pay a BIK!!!!

 

[MyAccountantOnline]

Don't forget with a company van you are allowed to take an old mattress to the dump once or twice a year without triggering the van benefit charge

Bargain that - well worth making a couple of trips to the dump each year.

Our local recycling centre wont allow people with vans to use them

 

[JEREMY HAWKE]

Don't forget with a company van you are allowed to take an old mattress to the dump once or twice a year without triggering the van benefit charge

Bargain that - well worth making a couple of trips to the dump each year.

Mine have been banned because we dont have a wasters carrier licence and I only dump stuff from our cottage

 

[UK Contractor Accountant]

Not one of my clients who have a Company van pay a BIK!!!!

same here - company dealt with once had a fleet of 30 vans with not one van benefit shown. Took the view that they would agree a PSA settlement with HMRC should they get caught on a compliance check up.

The risk of being investigated was so remote it was worth running with.

 

[WaveJumper]

Can't see how you would be able to claim any VAT back as in effect its a private sale to a LTD company (is the company even vat registered yet) maybe one of our accountants could comment

 

[Lisa Thomas]

Always best to speak to an accountant to ensure you are making the most from tax benefits (and also to help avoid costly mistakes.)

 

[Bobbo]

same here - company dealt with once had a fleet of 30 vans with not one van benefit shown. Took the view that they would agree a PSA settlement with HMRC should they get caught on a compliance check up.

The risk of being investigated was so remote it was worth running with.

I'm sure you're not meaning to, but this sounds awfully like "tax evasion is fine because you probably won't get caught".

 

[numbersrule]

Don't forget with a company van you are allowed to take an old mattress to the dump once or twice a year without triggering the van benefit charge

Bargain that - well worth making a couple of trips to the dump each year.

Our tip insists on a Waste Permit to use a van. ( I don't mean a Waste Carriers Lucence ). It's so the van is identified and recorded.

To be honest I'm not sure if you are just joking around?

Apologies for my serious reply, if you were, but it seems to me that the days when you could just turn up at a tip with a company van are long gone.

 

[numbersrule]

Can't see how you would be able to claim any VAT back as in effect its a private sale to a LTD company (is the company even vat registered yet) maybe one of our accountants could comment

Hi Wavejumper
It seems to me that there would not be any VAT on the sale by Jamestrade to his business so there would be no Input VAT to claim back.

 

[UK Contractor Accountant]

I'm sure you're not meaning to, but this sounds awfully like "tax evasion is fine because you probably won't get caught".

Wasnt our tax advice- We were the Auditors and was flagged up on a audit I was involved in.