Purchase of a commercial vehicle

UK Discussion in 'General Accountancy Discussion' started by jaymal, Jan 23, 2019.

  1. jaymal


    Jan 23, 2019
    Likes Received:
    Not sure if this is the correct place for this post, please move or remove if not.

    I have already spoke to my accountant but they seem slightly confused by my situation, I am waiting to hear back from them fully.

    I have a Limited company, VAT registered and I am the sole Director and I do not employ anyone (partner is a shareholder but not employed) Working in the UK Rail/Construction industry. (no CIS applies)

    I am wanting to purchase a commercial vehicle (pick-up LGV qualifying) to use for work as I need to transport tools/survey equipment to sometimes remote locations. I will use the vehicle for approx 20% personal use (weekends) and I'm happy to pick up any additional personal tax this may cause.

    The purchase will be using Ford dealer finance with a deposit of the value of the VAT due on the vehicle.

    I also have a personal car which I will still use when I am going to the office as I wont need to use the pick-up every day.

    My questions are:
    • Is this all OK to do?
    • Can I claim the VAT back for the vehicle purchase straight away even though I'm paying monthly for it? (I understand i may only be able to claim back 80% of the VAT if I am using it for 20% personal use)
    • I currently submit my mileage (for personal car) as an expense. How would I go about paying for the fuel for the commercial vehicle, would it need to be paid from the business account or would I pay personally for the fuel and then just claim the mileage as an expense like I do for the car?
    • How would i separate out the mileage i do in the pick-up and the car? (depending on how the fuel is paid for)
    • What sort of impact would I expect on my personal tax? Is the below quote correct? (taken from https://www.autoexpress.co.uk/vans/95748/double-cab-pick-up-truck-tax-benefits-explained)
    • "There’s no sliding scale for double-cab 4x4 pick-ups thanks to a fixed BIK rate, and for 2016/17 it’s set at just £3,170.That means a 20 per cent taxpayer would hand over £634 to HMRC for the privilege of using their company pickup as personal transport, while a 40 per cent taxpayer will have to cough up £1,268."
    • Insurance/Tax/MOT/tyres etc would that need to be paid by the company?
    Any advice would be greatly received.

    jaymal, Jan 23, 2019
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