What is a van for tax purposes?

[neilsolaris]

Hi,

I wondered if anyone knew the latest rules regarding what constitutes a van for tax purposes please? I seem to remember that a vehicle with blacked out windows qualifies as a van, but I wondered if there's more to it than that. In particular, do you know if the Hyundai i800 qualifies as a van? It's a people's carrier technically though.

And can I check also what the tax advantages of a van are please? This second hand vehicle will be used 100% for the company. If it's classed as a van, it is eligible for the AIA, isn't it? But not so if it's a car?

And what about the VAT? Whether it's a car or van, the input tax can be claimed in full, can't it?

So the only advantage I can see to it being classed as a van is that the expense can be claimed quicker for tax purposes?

Thanks for your advice.

 

[Newchodge]

Does the people carrier have seats throughout or is there a large unseated area for non-person transport?

 

[neilsolaris]

It's basically a people carrier, the Hyundai i800 has back seats, and a large boot. The back seats can fold down though.

From what I'm reading online, I don't think this vehicle qualifies as a van, as it is not primarily constructed for the conveyance of goods. Would you agree?

Am I also right in saying that a used car is not eligible for claiming back VAT?

There are no employees in this company, and there won't be any private use of this vehicle. So no BIK as far as I'm aware. So, what drawbacks are there to buying a car as opposed to a van in this situation, apart from the VAT I've already mentioned?

Many thanks.

 

[Lucan Unlordly]

I seem to remember that a vehicle with blacked out windows qualifies as a van, but I wondered if there's more to it than that.

I asked my accountant the same question just a couple of months ago and his view was that it's no longer acceptable practice, that HMRC wised up to this a while back.

A mate of mine has a camper van which he uses to carry his tools and does sleep in it when working away. I'll ask him if he bought it through the business?

 

[neilsolaris]

Thanks Lucan, I appreciate you finding out.

I think generally, buying a van for the company is much better from a tax perspective, isn't it?

 

[Lucan Unlordly]

Thanks Lucan, I appreciate you finding out.

I think generally, buying a van for the company is much better from a tax perspective, isn't it?

I'm running a 15 year old one which I bought out of personal/sole trader funds 10 years ago so paid off. Now I tax and insure it through the limited company and calculate the benefit in kind when using for personal stuff, which is very occasional.

 

[WaveJumper]

I would always advocate sitting down with your accountant and looking at the best options and the most tax efficient method in the meantime have a read here some useful info

https://www.checkatrade.com/blog/trade/buying-a-van-for-business/

 

[neilsolaris]

I would always advocate sitting down with your accountant and looking at the best options and the most tax efficient method in the meantime have a read here some useful info

https://www.checkatrade.com/blog/trade/buying-a-van-for-business/

Many thanks for the link, that very handy, and it confirms many of the things I thought to be the case with a van. I've already emailed the accountant, but I like to gain some knowledge of my own in the meantime.

 

[IanSuth]

Many thanks for the link, that very handy, and it confirms many of the things I thought to be the case with a van. I've already emailed the accountant, but I like to gain some knowledge of my own in the meantime.

i know for a while there were a lot of hatchbacks running around with perforated vinyl prints over the rear windows trying to claim to be van's and also vehicles with magnetic name signs trying to claim to be commercial - that was under the old tax regimes for company cars they attracted up to i think 35% BIK tax whilst vans/commercial vehicles (which included motorcycles) was 10%

But anything related to vehicles the tax regime changes like the wind so you need to speak to a professional who doesn't just know what the rules are today but any already stated rule changes coming down the line and how they will impact decisions you take today

 

[neilsolaris]

i know for a while there were a lot of hatchbacks running around with perforated vinyl prints over the rear windows trying to claim to be van's and also vehicles with magnetic name signs trying to claim to be commercial - that was under the old tax regimes for company cars they attracted up to i think 35% BIK tax whilst vans/commercial vehicles (which included motorcycles) was 10%

But anything related to vehicles the tax regime changes like the wind so you need to speak to a professional who doesn't just know what the rules are today but any already stated rule changes coming down the line and how they will impact decisions you take today

Many thanks Ian.

 

[JEREMY HAWKE]

i know for a while there were a lot of hatchbacks running around with perforated vinyl prints over the rear windows trying to claim to be van's and also vehicles with magnetic name signs trying to claim to be commercial - that was under the old tax regimes for company cars they attracted up to i think 35% BIK tax whilst vans/commercial vehicles (which included motorcycles) was 10%

But anything related to vehicles the tax regime changes like the wind so you need to speak to a professional who doesn't just know what the rules are today but any already stated rule changes coming down the line and how they will impact decisions you take today

Those little Corsas were actually sold as vans

 

[Bobbo]

There are no employees in this company, and there won't be any private use of this vehicle. So no BIK as far as I'm aware.

If there's no employees who's going to be driving it??

 

[neilsolaris]

If there's no employees who's going to be driving it??

The owner/sole director.

 

[paulears]

Autotrader describes it as having the durability of a commercial vehicle - suggesting that it isn't one. All those seats rather preclude it being classed as a van or a commercial vehicle. It would be treated by the DVLA as a non-commercial too, and your insurance company would probably insist it was a people carrier. I doubt you'll get away with this one.

 

[JEREMY HAWKE]

No the !800 is not a van for tax purposes or any of purpose!

 

[DWS]

No the !800 is not a van for tax purposes or any of purpose!

And as a car this would mean a BIK for the Director!

 

[WaveJumper]

Am I driving a car or a van? - Admiral

Can I drive a van on my car insurance? We discuss how van-like cars are categorised, differences between cars and vans and how they impact insurance.

www.admiral.com

Car-derived vans and dual purpose vehicles

www.gov.uk

I assume this list is still the most uptodate HMRC have:

https://assets.publishing.service.gov.uk/media/5a805dcbed915d74e622e099/Car_derived_Van_updateMay2015.pdf

 

[neilsolaris]

Am I driving a car or a van? - Admiral

Can I drive a van on my car insurance? We discuss how van-like cars are categorised, differences between cars and vans and how they impact insurance.

www.admiral.com

Car-derived vans and dual purpose vehicles

www.gov.uk

I assume this list is still the most uptodate HMRC have:

https://assets.publishing.service.gov.uk/media/5a805dcbed915d74e622e099/Car_derived_Van_updateMay2015.pdf

That's a very handy list, many thanks.

I realized after I posted my initial question (and I found the info online) that this would definitely not be classed as a van for tax purposes. I just couldn't remember what the latest rules were.

If buying a car then, and you're self-employed as well as a director of a company, I guess you might as well buy the car and put it through your self-employed business right? It seems more straightforward.

 

[DWS]

That's a very handy list, many thanks.

I realized after I posted my initial question (and I found the info online) that this would definitely not be classed as a van for tax purposes. I just couldn't remember what the latest rules were.

If buying a car then, and you're self-employed as well as a director of a company, I guess you might as well buy the car and put it through your self-employed business right? It seems more straightforward.

Who is the car for? The self employment or the Company?
Or will both be using it?

 

[neilsolaris]

Either can use it. They are in similar business sectors.

 

[DWS]

Either can use it. They are in similar business sectors.

Okay, so then you have the issue of inter business transactions, if the Ltd Co buys it then it is a BIK for the Director, if the sole trader buys it then you have a bigger % of private use when the Ltd Co uses it.
Are both businesses completely separate and could not be deemed by HMRC to be one? seeing as you say similar business sectors.