Kombi a commercial vehicle?

VanMan48 said:
Just wanted to see who's done this? I'm not vat registered but am a ltd co, and wanted to put the van (a T32 Kombi) through the biz. About 80% use will be business, and also have use of the wife's car for any other personal trips.

Was looking at putting down a cash deposit and the rest on HP or personal loan.

Could the business put down the cash deposit and make the HP payments? Or is it better to purchase personally and then charge the biz milage etc?

Was made aware of the horrid benefit in kind tax but is that only applicable if vat is reclaimed? I've asked my accountant all this but wanted to ask here too!

Thanks for any advice!
Click to expand...

Its a £3000 a year benefit in kind for me and i work for a Ltd company who is VAT registered so I pay circa £50 a month towards mine a month out of my salary. Fyi - All commercial vehicles up to 3.5 tonne are capped at that rate regardless of value.

The above maybe pointless to you but posted it just in case ha
 
Just to add to the £3000 BiK figure, if your company is paying for the fuel, then you'll also be liable to tax on an additional £600 I believe.

Need to do my sums for when I get mine (I'm buying through my VAT registered Ltd Co.), but I think that's still cheaper than paying for fuel out of your own pocket.
 
Been looking at this further. This seems to be the (confusing) case:

VAT: class a t32 as van so can claim that back no probs
DVLA: class it as a van (N1) so has van speed limits etc.
HMRC: class it as car as it has rear seats and windows and state what other departments class it as is irrelavent, it's a car in their eyes and subject to the horrendous company car bik.

Messed up and very misleading!
 
Bit of a nightmare as alot of the time I wont even have rear seats in, only put them in when required.
 
It would be good to hear of anyone who's been checked and argued this successfully. I'm edging towards putting it through privately and then claiming back milage, also seeing as i'll be converting to a camper etc later on and will probably be less likely to argue my case.
 
MotoPL said:
Must admit though, this looks pretty damning :(

EIM23110 - Employment Income Manual - HMRC internal manual - GOV.UK

Just hoping the line "If a vehicle has side windows behind the driver and passenger doors, it is also unlikely to fall within this exception." is where the 1 tonne payload comes in. But I don't see any clarification/explanation on this statement
Click to expand...

Yes that's where the 1 ton comes in.


The 3000 bik for use and 600 bik for fuel as above are correct.
Also to consider is you need to also include a NI contribution which comes to nearly £800 that your ltd pays aswell.

Still worked out better for me but at some point I might be better trying to buy it out of the company (for a low but close to market value).
 
Seem to be plenty of people running them ok as vans which is comforting.

But the thing is, as i understand it, if they class it as a car, then you have to pay tax on BiK regardless of type use, whereas if it's a van then you don't if it's just business use.
So could have a massive tax effect even if only used for businesd mileage if hmrc say its a car.
Or have i got that wrong?
 
if you use a business car only for business use you don't pay BIK either.

Only applies to private miles. Car's drawbacks in the business are lack of Vat off and only 8% corp back unless its really low emmissions.

the classification, N1 or M etc is how they decide on whether its a car or van, so a carravel is a car, a Kombi is a van, as is a panel van.
So a kombi is absolutely safe when it comes to being a van for private miles (much less than private miles on a car).

Where the 1 ton comes into it is whether you can get the Vat off it.
 
you think people would accept a wee corsa instead of a van when going around reading meters etc if they had to pay BIK using it for business miles only?
 
Chrisfraser05 said:
if you use a business car only for business use you don't pay BIK either.

Only applies to private miles. Car's drawbacks in the business are lack of Vat off and only 8% corp back unless its really low emmissions.

the classification, N1 or M etc is how they decide on whether its a car or van, so a carravel is a car, a Kombi is a van, as is a panel van.
So a kombi is absolutely safe when it comes to being a van for private miles (much less than private miles on a car).

Where the 1 ton comes into it is whether you can get the Vat off it.
Click to expand...

That's a relief then cause i was only planning on using mine for business use.
Was envisaging a sudden nasty tax bill when mr taxman suddenly reclassified my van. Phew!
 
You are allowed 'insignificant' private use when its a purely business vehicle. How that's proven if an inspection ever happens is beyond me!
 
I have been here with a t5. Vanman48 is correct.
The taxman treats a kombi diffrerently for VAT and BIK purposes. You can reclaim VAT based on payload if it is over 1 tonne. But you will be liable for BIK as a car because of the rear seats. Forget the N1 and M1 classifications because the revenue do things their way.

If you call the hmrc helpline, they will not give you a clear answer. I eventually spoke to someone there in our great north east and he was very down to earth about it and agreed it was all stacked in their favour. He said that I might get away with treating a kombi as a van for private use but said that i might have a fight on my hands if i had an investigation.

Why not buy the van through the ltd company and keep it for a year with no private use whatsoever - that is the phrase to use if you have an investigation. Then sell the van to yourself or a family member for 50% of the price you paid. Your VW dealer will give you such a price if you ask for a px valuation so you have evidence to show Hector if he wants to shine a torch up your bum on an investigation. Then run the van privately and charge mileage to the company. All depends on what your business mileage is likely to be.
 
Apologies if this is the wrong place to post this, or if it has been posted before. My accountant came to see me yesterday, they have been notified by HMRC that they (HMRC) have won a tribunal that found that a Transporter Kombi has been judged to be a car rather than a commercial vehicle. I have attached what info I have been given at the bottom of this.

I haven't read every line but essentially HMRC took Coca Cola and two of its employees to court, one has a Transporter the other a Vivaro, the judge decided that the Vivaro was a commercial vehicle but the Kombi was as equally suited to carrying passengers as it was Cargo so can't therefore be a commercial vehicle. The key items seems to be that the load bay and passenger cabin are not separate (I assume it is in the Vivaro?)

I've been told it's wise from the next tax year to treat it as a car for tax purposes. (I do have a very safe and reputable accountant so I suspect they're are erring on the side of caution) BIK on a Kombi as a car is horrific!

My logbook etc. says it's a commercial vehicle but HMRC have challenged that law and won. There is an appeal lodged on HMRC's website but no date has been set as yet. I have a T32 so it's got the 1000kg requirement for commercial vehicle BIK and we've already claimed the VAT so that's safe, it's just future BIK to worry about.

Here's the email I received with a link to the trial judge's notes.

The “double-cab pick-up” loophole has been extensively used as a tax efficient (but not fuel efficient) benefit-in-kind, enabling a large, and nowadays quite luxurious, vehicle to be provided to directors at minimum tax and NIC cost, and also obtaining full VAT recovery.

The basis of the classification as a van is that, despite having two rows of seats and windows in the sides of the rear cabin, the pick-up is capable of carrying 1 tonne of cargo, and so is “a vehicle of a construction primarily suited for the conveyance of goods or burden of any description”. This 1 tonne rule can also apply to panel vans, suitably adapted, but HMRC have raised concerns for a number of reasons, including cases where the load bay and the passenger cabins are not separated.

Three recent tribunal appeals were heard together concerning two versions of VW Kombi and a Vauxhall Vivaro. All three were originally traditional vans, as opposed to pick-ups, with a second row of seats, but still capable of carrying 1 tonne of cargo. The result of the appeal was split, with both VW Kombis classed as cars but the Vauxhall as a van.

The reasoning behind the decision was a requirement by the First Tier Tax Tribunal that the word “construction” should be considered broadly, to include all modifications and consider the whole of the vehicle’s parts, even if removable, and to consider the primary purpose of the vehicle. The Vauxhall was found to still be primarily suited to the carriage of goods, but the two VWs were considered to be genuinely multi-purpose vehicles with no overriding primary suitability for either.

A First Tier Tribunal decision is not binding, but one should now expect an increase in HMRC’s challenges to the status of “vans” with more than a single row of seats. The clear inference is that the 1 tonne load capacity rule is not the end of the story, and one must also stand back and consider the primary purpose of the vehicle once modified.

One must also be concerned as to how this may affect the double-cab picks. While the load carrying capacity of such vehicles cannot be denied, in practice, many of the load bays are never used and the passenger cabins are large and very well appointed. Are these primarily suited to the conveyance of goods, or are they actually multi-purpose vehicles, equally suited to use for both passengers and cargo?

Caution is needed – given the high cost and poor fuel economy of double cab pick-ups, the difference in the tax cost should HMRC succeed in a challenge would be painful.
 
So if this is the case does that mean the classification will change from N1 to M1 and then means car speed limits apply?
 
You must log in or register to reply here.

Similar threads

VanMan48
Self employed BIK question
Replies
10
Views
2K
Shaun Witts
Shaun Witts
M
Engine Reborn Ltd
Replies
9
Views
685
Bigsidavies
Bigsidavies
vincethomas
For Sale 2021 T30 150PS Highline Kombi Conversion. £23,500 +VAT
Replies
1
Views
2K
Sackmycook
Sackmycook
Skyliner33
Looking for a caravan? Funny eBay ad
Replies
12
Views
5K
russvphoto
russvphoto
Back
Top