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HM Accountax Ltd
HM Accountax Ltd, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 302
Experience:  I am an accountancy professional with more than10 years hand on experience in audit, accountancy and tax affairs.
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I have been trying to find out about car tax etc. I have

Customer Question

I have been trying to find out about car tax etc.
JA: Have you talked to a tax professional about this?
Customer: I have online accountant, but I get the impression he doesn't really know. He just sends links from HMRC site.
JA: Anything else you want the Accountant to know before I connect you?
Customer: I am a 1 person Ltd company and want a double cab VAN (seats and windows in the middle). My accountant says I would have to pay BIK for car rate even if I don't use it for personal use, because it is "available" to me because I can't keep it away from my house (which is the office). Thanks
Submitted: 7 days ago.
Category: Tax
Expert:  HM Accountax Ltd replied 7 days ago.

Hi,

I am an advisor at JA and happy to assist you.

I am looking into your query and come back to you shortly.

Regards

HMAT

Customer: replied 7 days ago.
Many thanks
Expert:  HM Accountax Ltd replied 7 days ago.

Hi,

A taxable benefit in the form of a Van Benefit Charge (VBC) arises when an employee is provided with a company van and it is used for personal journeys. If your van is approved VAN from HMRC purposes then you'll be subject to VAN Benefit charge not car.

If questioned, you need to justify that there was no private use of car.

I hope this answers the query.

Regards

HMAT

Customer: replied 7 days ago.
Thanks for the reply.
I think there are lots of grey areas around this and just wanted to double check things.
My account has given me the impression that the following statements are true for Ltd company and wondered if you could confirm or not or unsure/grey area and would need justification if investigated.
1 A van with any payload can get vat back.
2 A double cab Van with over 1 ton payload can get vat back.
3 A double cab Van with less than 1 ton payload is treated as a car and can't get vat back.
4 If it is a van and no personal use then no BIK.
5 If double cab it is treated as a car for BIK due to windows and seats behind drivers seat (even if it has light goods road tax and van category on V5) does it make a difference if 1 ton payload is achieved.
6 If it is treated as a car (due to windows) then as an owner/operator HAS to incur BIK as personal use is expected as the vehicle won't be kept away from the home address...
I understand that HMRC have not clarified much of this but I feel my accountant has little experience in this and doesn't seem to be clear on what I would have to do or justify or what would defiantly not be possible/make sense financially.
Basically I want a double cab van and I don't want to pay BIK as it will be ONLY for business use. What are the requirements if possible? Many many thanks. Robert
Expert:  HM Accountax Ltd replied 6 days ago.

Hi,

These questions are beyond your original query, so please accept the offer and i'll answer your queries.

Regards

HMAT

Customer: replied 6 days ago.
I suppose this was my original query, probably poorly asked but not answered anyway.
I hadn't realised this was a 1 question only, I thought it was a weeks trial.
I am reluctant to spend more money as I can't be sure you can help.
Has your assistance finished until further payment?
Expert:  HM Accountax Ltd replied 6 days ago.

Hi Robert,

Thanks for your reply.

1. Correct. 2. Correct. 3. Correct 4. Correct. 5. It will still be car; 6. Correct.

I have provided some more details about your query below and a link for HMRC website confirming what is VAN and car.

VAN:

Vans with rear seats - Some vehicles look like vans and don’t have windows in the sides behind the driver. But they do have additional seats for carrying passengers behind the front row of seats (or they’re designed so they can be fitted with them). They’re sometimes known as combination vans or combi-vans. HMRC considers that this type of vehicle is a commercial vehicle for VAT purposes if it meets either of the following conditions:

  1. It has a payload of more than one tonne after the extra seats have been added.

  2. The dedicated load area (the load area that’s completely unaffected by the extra seats) is larger than the passenger area.

If it meets either of these conditions, then the vehicle is a commercial vehicle for VAT purposes and you can reclaim the input VAT if you follow the normal rules for reclaiming VAT.

HMRC has produced a list of car derived vans and vans with rear seats showing whether they’re classed as a van (commercial vehicle) or a car for VAT purposes:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/428510/Car_derived_Van_updateMay2015.pdf

There is another case - HMRC V Coca Cola

VAT Position:

If a vehicle is classed as VAN, you can claim the VAT back as far as the VAN is used for business purpose only.

BIK Position:

A taxable benefit in the form of a Van Benefit Charge (VBC) arises when an employee is provided with a company van and it is used for personal journeys.

I hope this answers the query.

Regards

HMAT