Putting a VW Kombi through Ltd co business / BIK question

Hi

I’m considering purchasing a new vw kombi van (t32, gross weight over a tonne) through my ltd co business and reclaiming the vat (i’m flat rate). This would be used for work, I’m self employed, travelling to various places of work etc.

Also at some point I may want to convert this into a camper so I can save on hotels, and also as I sometimes need to be in remote locations due to the nature of my job (landscape photographer) for early starts where there are no hotels nearby.

Anyhow, my question is can I do the above or will I be hit by BIK tax to such an extent where it isn’t worth doing? I have use of my wife’s car for private usage, going to the shops/holidays etc. My accountant is away at the mo so will ask him when he returns but wanted to start researching now.

Varying opinions around the web and my accountant is looking into it, but good to hear of any first hand experiences if anyone has done something similar.

Thanks!

If yer in the flat rate scheme you can’t reclaim VAT on purchases (except in exceptional circumstances – like if you want to buy a duck house I expect).

Treated as a car rather than a commercial vehicle which also restricts your VAT depending on build

http://www.hmrc.gov.uk/manuals/vitmanual/vit50600.htm

yer in the flat rate scheme you can’t reclaim VAT on purchases (except in exceptional circumstances – like if you want to buy a duck house I expect).

Assets totalling over £2000 can have the VAT reclaim on fiat rate schemes.

AFAIK, its all BIK is all about personal use. If you don’t use it for personal use, out of work there is no benefit, and therefore no tax. As soon as you use it privately for personal use, there is a benefit and you have a tax liability. IANATM.

Thanks! I’d use the missus car for private use, but i think there is the issue of the van being parked at home and therefore ‘available’ for private use even if i argue until i’m blue in the face that it wouldn’t be used for such!

Regardless of it being parked at home, plenty of vans are taken home for security, it comes down to the construction. Everyone is trying to jump on the band wagon with combi and camper vans but HMRC were ahead of the game on this one for once.

you can reclaim the VAT if its over £1000. I have a van through my ltd company as do many of the people i work with. I also know people who have converted the van and claimed it back.

yeah i think it’s probably do-able. the kombi will be a T32 (so over a tonne payload) so the vat back is straightforward as any work related single purchases over £2k can be reclaimed. It’s whether the bik is going to be the pain, and also if putting the conversion cost through the biz will be frowned upon.

If it’s caught as a car with BIK, it’ll be expensive – probably not worth doing, so 45ppm and claim for nights out (at whatever the non-hotel rate is these days).

FWIW I ran a motorcycle through my Ltd company, claimed back the vat and only used for home-to-(contract)-work. No BIK at all as unlike a car you can.

ok cheers, the whole thing is confusing but think I’ve got a good argument for having one if I ever got checked

I looked into this a lot & the info i gathered seemed to suggest that if you have Kombi listed as your company car then you’d pay company car tax as per value & emissions (unlike a panel van). However if it’s just a van owned by the company which is ‘kept at the company premises‘ overnight then you just claim the vat back. As with any of these small business tax issues, it’s unlikeley HMRC will catch you, but just make sure you have the money in the bank to pay your debts if they do & don’t tell anyone on here as they will no doubt vilify you for being a tax dodging scumbag who is doing their fair share to bring UK society to it’s knees.

I’ve been looking into this for getting a company motorbike, that I will share business / private mileage on. Well, okay, my accountant has…

It seems in that case we just need to only claim for a portion of the VAT depending on the portion of mileage split. There will be a BIK but it’s not huge.

At least, that is what we understand!

Rachel

Your kombi will attract bik tax I think, it changed a couple of years ago and it’s prohibitive. As a photographer you wouldn’t need a crew carrier and you’ve got a car so why not just buy a panel van and glaze the back if you need to? Would have thought you could still do everything you want that way?

There are exceptions especially with the hi load kombis where there is a genuine business need for it but from what I’ve read it’s a ball ache and it doesn’t sound like you’d get anywhere with your job. All looks a bit confusing though!

Thanks. I think once the conversion is done and I re-registered it as a motor home then that’s classed as a car by hmrc and therefore attracts horrendous bik tax. If I keep it registered as a van then the bik is about £600 a year which would then allow some private use I believe, so manageable. The only negative is slightly reduced speed limits for vans. I may however be wrong about all of this!

Quite bored of repeating myself but please read my links above. At the moment HMRC are treating a van that is converted/modified to allow another set of seats (fixed, folding, clip in) that decreases the load area or capacity as car for benefit in kind. Even though you may have reclaimed the VAT on the van once you modify it to become a camper you should be repaying some of the VAT. We have looked into on our clients behalf and taken tax advice which confirmed the above. Plenty of businesses have tried this on and now getting caught out too.

Read what defines a car

Useful as it shows some of the ways HMRC has one many cases of treating a van as car for taxation[/url]

Rachel, on a motorbike you will BIK on 20% of the value of the purchase price of the asset for personal use. We have a quite a few London clients who do this and never challenged by HMRC.

Thanks. I think once the conversion is done and I re-registered it as a motor home then that’s classed as a car by hmrc and therefore attracts horrendous bik tax. If I keep it registered as a van then the bik is about £600 a year which would then allow some private use I believe, so manageable. The only negative is slightly reduced speed limits for vans. I may however be wrong about all of this!

Nothing to do with registering it as a camper. It is the physical modification which changes tax treatment not a bit of paper.

thanks craigxxl – that’s useful to know I’m not alone in doing it. Adds some confidence. Just need the VAT registration to come through now as I can claim the VAT back and make it even better 🙂

Rachel

I was speaking to VW about this on the weekend. They were saying that the Transporters including kombis were okay to be classed as vans (for VAT reclaim purposes) but that the Caddys are not. Their Caddy sales have correspondingly collapsed.

Secondly – kudos for making enough money as a Landscape tog to make it a career. If you managed that I’m sure you can figure out the VAT rules 😉

..personally, I’m off to outsource the question to my accountant.

As well as the VAT and BIK don’t forget to ask your accountant about the capital allowances too.

If I keep it registered as a van then the bik is about £600 a year which would then allow some private use I believe, so manageable

A kombi is not a van…. BIK is about 35% on a kombi which for a 35k van so £2245 a year at lower rate…

All getting a bit confusing now, even the governments own list doesn’t mention VW’s. So a T5 van, with deeply tinted rear windows and an fold down bed allowing load area to be used (bed for use to save in on/site accommodation costs when working away) – car or van? Surely in any flavour, a T5 is a van? No one if asked would say it’s a car would they?

Rachel, on a motorbike you will BIK on 20% of the value of the purchase price of the asset for personal use. We have a quite a few London clients who do this and never challenged by HMRC.

Plus you can also put through all running (including fuel) and safety gear costs, then pro-rata against business vs personal.

I just kept ALL receipts and noted the mileage on each one as I filled up. just to make it clear there was no personal use.

All getting a bit confusing now, even the governments own list doesn’t mention VW’s. So a T5 van, with deeply tinted rear windows and an fold down bed allowing load area to be used (bed for use to save in on/site accommodation costs when working away) – car or van? Surely in any flavour, a T5 is a van? No one if asked would say it’s a car would they?

As long as you’ve only the 2/3 seats up front that should be ok, but once you’ve seatbelt seats in the rear it’s a car, from a BIK perspective – from what I understand now.

b r – I will be about 50/50 business/personal use on the bike, I think. Using it to travel to conferences across Europe is a bonus – Keszthely, Hungary and Barcelona were highlights last year 😀

Seems as I’m flat rate VAT, I can claim ALL the VAT but only part of the capital costs and then pay BIK. I’m okay with that.

Rachel

Rachel, if you’re paying BIK I assume you must be limited in which case capital allowances aren’t restricted for personal use like a sole trader/partnership

craig – where are you based?

Thanks for the replies much appreciated!

craig – where are you based?

Just outside Leeds.

craigxxl – so I don’t need to pro-rata the capital against usage? Brilliant!!!!

Basically, it sounds like my only “cost” is the 20% BIK, then? This just gets better all the time.

Rachel

Rachel – one problem I had though was finding an Insurance Company to insure it through, took a lot of effort

Sorry to resurrect an old post, but just had a query on buying a van to convert.
Say for example I bought said van for £10k + Vat through my vat registered limited company , then I could claim back the £2k vat. This van would be used for business purposes
If I were to then put Windows in , insulate and add rock and roll bed etc, could I then sell the van to myself personally (a few months later) for say £8k + VAT ? Or would that ring HMRC alarm bells ?