Car vs Pickup as LTD company

[JLP]

Does anyone know the ins and outs of having a pickup vs a car as a privately owned vehicle and the tax paid to you through your LTD company for this?

I know I would be better off if the vehicle was a pickup owned by the company rather than a car as the taxable amount is a lot less due to it being a LCV (given it meets the weight criteria) but cant find anything about it if privately owned and used for business

 

[frank horton]

which ever way u choose I'd say the 1 with less paper work.......
I had a pick up registered and payed for by my company.......but it was a time ago.......
two minute call to the accountant should sort that out......

 

[rtbcomp]

I suspect if it's privately owned you'd need to charge the company by the mile. Certainly a whole lot easier.

 

[Kent]

Read that three times and not sure if the exact ask, however

A car owned by the company even if you own the company is a benefit in kind. Ie you personally get to pay taxes to the government for its availability and use
A car owned by you should be charged tosaid company at so much a mile and there are agreed rates for this, its not down to fuel consumption
Commercial vehicle and the company or vat registrd sole trader gets to claim the vat paid back in thier return car not so, well as a genralisation

Sorry if some of tgats changed any but thats a valid point things change and what is ok a present might not be in the future

 

[MattH]

I suspect if it's privately owned you'd need to charge the company by the mile. Certainly a whole lot easier.

If you do this remember that there are tax allowance limits per mile.
Last time I was doing this it was 45p per mile up to 10000 miles and 25p per mile there after.
Anything paid above these limits will be subject to income tax and NI.
You would need to record all this and submit it as a P11d with your annual tax return.

 

[MattH]

Read that three times and not sure if the exact ask, however

A car owned by the company even if you own the company is a benefit in kind. Ie you personally get to pay taxes to the government for its availability and use

Only IF it is used for personal use.
And now that is specified as one run to the local shops in a year.
If it is used for personal you are now charged a fixed BIC charge dependent on your tax band.
Last year I think it was something like £2200 per year for a higher earner.
So if you only use it for a few miles then you get completely bent over!

I suggest if you have a company vehicle then only use it for company business and use your own private vehicle for personal use only.

 

[Kent]

Only IF it is used for personal use.
And now that is specified as one run to the local shops in a year.
If it is used for personal you are now charged a fixed BIC charge dependent on your tax band.
Last year I think it was something like £2200 per year for a higher earner.
So if you only use it for a few miles then you get completely bent over!

I suggest if you have a company vehicle then only use it for company business and use your own private vehicle for personal use only.

The test is " if available for " to and from work is enough really to be liable
Frankly company cars aint much of a perk any longer

 

[WorkshopChris]

As far as i am aware if the pickup is owned by the business you can claim the vat, would this make a difference to the decision.

 

[rtbcomp]

If you do this remember that there are tax allowance limits per mile.
Last time I was doing this it was 45p per mile up to 10000 miles and 25p per mile there after.
Anything paid above these limits will be subject to income tax and NI.
You would need to record all this and submit it as a P11d with your annual tax return.

I thought that might be the case. I suppose HMRC would want a cut if you charged £20 per mile!.

 

[JLP]

BIC charge is much cheaper on pickup due to LCV it’s more like £600.

I already get reimbursed at the applicable rate for my mileage on my current car and I am aware it is not due to engine size.

I was just after like experiences as to which would be a better solution when using it for both business and personal mileage.

It seems you pay the BIC charge then charges for your fuel if it’s through company car and just get paid the mileage allowance if a personally owned motor?

 

[JLP]

As far as i am aware if the pickup is owned by the business you can claim the vat, would this make a difference to the decision.

Not really as need to buy from a dealership to have to worry about getting a VAT invoice most of the time but it is something I am considering

 

[8ob]

The test is " if available for " to and from work is enough really to be liable
Frankly company cars aint much of a perk any longer

Quite right, cars or trucks furnished for an individuals use need to be avoided as far as the bookwork goes. its far better for all vehicles to be deemed pool cars although that can rear its ugly head if one is stopped by plod outside of buisness use/hours. The insurance on all our trucks,cars and vans on the fleetplan clearly state not for social ,domestic and pleasure use.

Bob

 

[knighty]

8ob beet me to, I'd have it as a pool car, so it's a car just for work use.... but when you insure it insure it for social/domestic/pleasure too

if you're vat registered you can get the vat back on fuel too

 

[Matrixx]

I went through this, its best to fund the vehicle your self and claim milage, even if you have two vehicles one for work and one for private use they will still say you have use of the works vehicle and could use it for your non work use there for it is a taxable benift, and pool cars now have very strict usage requirements, and will possibly trigger a tax investigation/VAT check.

 

[rtbcomp]

8ob beet me to, I'd have it as a pool car, so it's a car just for work use.... but when you insure it insure it for social/domestic/pleasure too

if you're vat registered you can get the vat back on fuel too

Trouble is if you insure for social/domestic/pleasure HMRC can turn round and say you must be using it for personal mileage too.

 

[Cobbler]

I went through this, its best to fund the vehicle your self and claim milage, even if you have two vehicles one for work and one for private use they will still say you have use of the works vehicle and could use it for your non work use there for it is a taxable benift, and pool cars now have very strict usage requirements, and will possibly trigger a tax investigation/VAT check.

My wife’s stepfather got caught on that one, he had a small business he ran from home & ran a Jag. He decided to buy a car on the company as well, which he kept at home. Fast forward several years & he ended up with a massive tax bill, all his arguments about I’ve got a Jag for personal use cut no water & he had to pay it. We all knew he would have to pay tax on it if the car is kept at your home addrebut he was one of these people you couldn’t tell anything.

 

[rtbcomp]

^^ Difficult if you work from home, where else can you keep a vehicle? How do self-employed mini-cab drivers go on?

 

[Gavinbat]

Hi,
Self employed is different rules to limited companies.
As self employed you buy the vehicle and the company pays for fuel and maintenance.
You need some receipts for fuel you've paid for to cover private mileage.
Cheers

 

[knighty]

there's a specific note in HMRC rules etc. for driving a company vehicle home, saying (something along the lines of) it's ok to drive a pool vehicle home at night, and that doesn't count as personal use

(I can't remember the exact wording for this, so check it's right before you make decisions based on it!)


thinking about it... you're probably better off owning the car personally and then billing the company for the milage... it's tax free and you can pay yourself more than it actually costs... 45p/mile for first 10k miles then 25p after (tax free)

EDIT: oops just realised MattH already said the same thing above :-o

 

[Matrixx]

I think you will find that you are not allowed to take a pool car home, it must stay at work or other location if away from home , as soon as you take it home it becomes a benifit in kind.