Private useage of Company Van......


P

puzzled van man

Hi Guys, quick question regarding private usage of my Van (self
employed).
We have a private car which is used in the main, but I *may* have used
the Van occasionally during the year here and there, but certainly
nothing significant. Shall I go ahead and just claim 100% business use
as far as expenses go, or play 'safe' and add a % of 'private' just to
cover myself.
My business mileage has been around 30k, IF I've used it for any
private it's been a couple of runs to the shop or suchlike when the
missus has been out in the car.
Again, thanks in advance to you knowledgable ones.
 
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A

Alan Ferris

We have a private car which is used in the main, but I *may* have used
the Van occasionally during the year here and there, but certainly
nothing significant. Shall I go ahead and just claim 100% business use
as far as expenses go, or play 'safe' and add a % of 'private' just to
cover myself.
If it is nothing significant, then why do you not wish to be honest
and tell the tax man?

--
Alan "Ferrit" Ferris

()'.'.'()
( (T) )
( ) . ( )
(")_(")
 
T

Troy Steadman

puzzled said:
Hi Guys, quick question regarding private usage of my Van (self
employed).
We have a private car which is used in the main, but I *may* have used
the Van occasionally during the year here and there, but certainly
nothing significant. Shall I go ahead and just claim 100% business use
as far as expenses go, or play 'safe' and add a % of 'private' just to
cover myself.
My business mileage has been around 30k, IF I've used it for any
private it's been a couple of runs to the shop or suchlike when the
missus has been out in the car.
Again, thanks in advance to you knowledgable ones.
Nobody would expect to see private usage of a van. Charge any mileage
you use in the private car for business - say when the van is broken
down - at 40p a mile and make sure you keep a detailed log. That 40p x
business mileage is tax free.

http://www.hmrc.gov.uk/rates/travel.htm

If you are VAT registered you can claim back the VAT on the petrol:

<can't find the link unfortuntately>

100% of the Van costs - Insurance, Petrol/Diesel, Repairs - are
allowable.

Unless the van is new or you have just started trading, you should have
considered this question before now - you *are* claiming Capital
Allowances on this van?
 
P

puzzled van man

I do wish to be honest Alan hence the civil original question.
The *insignificance* of any private use will be the odd journey to my
local Londis when we neede a pint of milk for example whereby I rather
foolishly neglected to log the details and the starting/closing
mileage. Its because I'm trying to be *honest* that I wish to declare
some private usage on the return.
Do you have a positive, helpful contribution to offer now I've
elaborated ?
Thanks for your input.
 
R

Ronald Raygun

Troy said:
Nobody would expect to see private usage of a van.
Nevertheless there seems to have been some, and it ought to be accounted
for, preferably through some sort of mileage reimbursement, since
otherwise it gets complicated, i.e. if capital allowances need to be
adjusted (99.5% business use, 0.5% private).
Charge any mileage
you use in the private car for business - say when the van is broken
down - at 40p a mile and make sure you keep a detailed log. That 40p x
business mileage is tax free.
Certainly, but that wasn't asked, and might not have happened.
But if it has, since no-one is really going to suspect anything,
and we're really only talking about a clean conscience, is to
work on the basis of reimbursement in kind. Aim to do as nearly
as possible as many business miles in the private car as private
miles in the business van.
 
M

mark

Troy said:
Nobody would expect to see private usage of a van. Charge any mileage
you use in the private car for business - say when the van is broken
down - at 40p a mile and make sure you keep a detailed log. That 40p x
business mileage is tax free.

http://www.hmrc.gov.uk/rates/travel.htm

If you are VAT registered you can claim back the VAT on the petrol:

<can't find the link unfortuntately>
I actually rang up the VAT people about this a few years ago.
I am a small business and I keep the van at home. It is sometimes used
for private use but the c&e man said that any mileage doneinthe van
travelling to work (in my case whatever site I was working at) was not
allowable but any mileage done in the course of my work *was*.
He suggested I use their flat rate payment scheme whereby you pay them a
flat rate each year and claim back *all* your mileage. This left me out
of pocket so I don't bother claiming any VAT on fuel at all to avoid any
grief :(
I only do about 10k a year in total with the van anyway.

The inland revenue were very helpful and said I should allow a
percentage for the (small) amount of private use the van gets.
 
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A

Alan Ferris

Nobody would expect to see private usage of a van.
I would not try that argument with a tax inspector.

--
Alan "Ferrit" Ferris

()'.'.'()
( (T) )
( ) . ( )
(")_(")
 
T

Troy Steadman

Alan said:
I would not try that argument with a tax inspector.
Well then you've got to be consistent. Private use of your cement mixer
because you used it build your garden wall? Private use of your spade
(5%)? Every phone call has a few trivialities: "Did you enjoy your
holiday?" - 10%? Workwear £104 - private use 60%?

The van is plant and plant is business.
 
T

Troy Steadman

mark said:
I actually rang up the VAT people about this a few years ago.
I am a small business and I keep the van at home. It is sometimes used
for private use but the c&e man said that any mileage doneinthe van
travelling to work (in my case whatever site I was working at) was not
allowable but any mileage done in the course of my work *was*.
He suggested I use their flat rate payment scheme whereby you pay them a
flat rate each year and claim back *all* your mileage. This left me out
of pocket so I don't bother claiming any VAT on fuel at all to avoid any
grief :(
I only do about 10k a year in total with the van anyway.

The inland revenue were very helpful and said I should allow a
percentage for the (small) amount of private use the van gets.
The VAT Scale charge is usually to be avoided.

There are things in tax which are "right" and there are things - Use of
Home as Office is an example - which although they are not "right" are
customary. Charging 100% of the costs of the van for VAT and tax (it's
best for VAT purposes if your van is a diesel) is customary even
though, as we all know, every business asset has a smidgen of private
use.

Travel to temporary workplace is allowable - there are loads of
examples here which will help you see, on a site by site, job by job,
hour by hour, basis whether your site is "a temporary workplace".

http://www.hmrc.gov.uk/employers/ebik/ebik3/business-travel-01.htm

Having gone down this "private use" road you might as well go the whole
hog and say (absurdly): "The van is my private van for my private use.
It has nothing to do with the business and is not an item of plant.
I'll charge the business 40p a mile Tax free every time it uses my
personal private van".

http://www.hmrc.gov.uk/manuals/eimanual/eim31240.htm

The 40p is for employees but by concession is extended to Sole Traders.
 
T

Troy Steadman

Troy said:
Well then you've got to be consistent. Private use of your cement mixer
because you used it build your garden wall? Private use of your spade
(5%)? Every phone call has a few trivialities: "Did you enjoy your
holiday?" - 10%? Workwear £104 - private use 60%?

The van is plant and plant is business.
Alan I wish I could introduce you to a very wealthy doctor formerly of
my acquaintance. A few years ago he had a Mercedes, a second Mercedes,
a Rolls Royce, a Ferrari and a Lamborghini, on which he claimed 75%,
50%, 25%, 25%, 25% business usage respectively. 200% (as it were) of
all the Tax, Fuel, Insurance, Repairs and of course Capital Allowances.

The Inspector was indeed not very impressed with this arrangement. He
settled eventually for a total of 75% business usage of the first
Mercedes :)
 
P

Peter Saxton

Alan I wish I could introduce you to a very wealthy doctor formerly of
my acquaintance. A few years ago he had a Mercedes, a second Mercedes,
a Rolls Royce, a Ferrari and a Lamborghini, on which he claimed 75%,
50%, 25%, 25%, 25% business usage respectively. 200% (as it were) of
all the Tax, Fuel, Insurance, Repairs and of course Capital Allowances.
200% of what?
 
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T

Troy Steadman

Peter said:
200% of what?
Exactly. When you look at it car by car it looks reasonable. So it's
200% of what would have been 100% if he'd had just the one car.
 
T

Tim

Peter said:
Exactly. When you look at it car by car it
looks reasonable. So it's 200% of what would
have been 100% if he'd had just the one car.
No it's not.
For instance, fuel costs:
If the average fuel consumption of the "several"
cars were equivalent to the fuel consumption of
the "one" car (that he could have had on it's own),
then he'd be claiming ** 100% ** of the fuel
costs that he would have done, if he'd had just
one car. He would just have done all the miles
in the one car, instead of spread over several cars.

Similarly, if the (business proportion of) cost of
the "one" car was the same as the total of the
(business proportions of) costs of the "several",
then capital allowances would have been
the same - again 100% rather than 200%.
 
R

Ronald Raygun

Troy said:
Exactly. When you look at it car by car it looks reasonable. So it's
200% of what would have been 100% if he'd had just the one car.
No, it's 200% of the average of the 5 cars, or 40% of all the cars.
 
T

Troy Steadman

Ronald said:
No, it's 200% of the average of the 5 cars, or 40% of all the cars.
Exactly. 40% of the 5 cars is 2 cars.

Let's say the good doctor fills each car with petrol each week, and
uses one tank per week on his rounds. It's easiest to think of the 5
cars as one huge car, perhaps welded nose-to-tail in a catherine-wheel.
He can roll that catherine-wheel along the street as often as he likes,
but he can only ever sit in one car while he is doing so.

For the privilege of driving this "one" (very big) car he gets tax
relief on two cars. Even when he's tucked up in bed sound asleep!
 
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T

Tim

Troy Steadman said:
Exactly. 40% of the 5 cars is 2 cars.

Let's say the good doctor fills each car with petrol
each week, and uses one tank per week on his rounds.
That's not consistent with your earlier percentages.

If he really does use 75% of Merc1 for business, 50%
of Merc2 for business etc, then he simply uses *two*
tanks of petrol, overall, each week, for business.
What's wrong with that? Nothing!
[Assuming it is what actually happens.]
 
P

Peter Saxton

Exactly. 40% of the 5 cars is 2 cars.

Let's say the good doctor fills each car with petrol each week, and
uses one tank per week on his rounds. It's easiest to think of the 5
cars as one huge car, perhaps welded nose-to-tail in a catherine-wheel.
He can roll that catherine-wheel along the street as often as he likes,
but he can only ever sit in one car while he is doing so.

For the privilege of driving this "one" (very big) car he gets tax
relief on two cars. Even when he's tucked up in bed sound asleep!
Troy

I can see why you left accounting!
 
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T

Troy Steadman

Tim said:
"Troy Steadman" wrote
Exactly. 40% of the 5 cars is 2 cars.

Let's say the good doctor fills each car with petrol
each week, and uses one tank per week on his rounds.
That's not consistent with your earlier percentages.

If he really does use 75% of Merc1 for business, 50%
of Merc2 for business etc, then he simply uses *two*
tanks of petrol, overall, each week, for business.
What's wrong with that? Nothing!
[Assuming it is what actually happens.]
Ye-es. You thought the percentages were actual?
 

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