Rep mobile - Hybrid

smcgiff

Company looking into possibility of reps using Hybrid cars (no specifics as yet) – any benefits of reps using these cars from a tax point of view.

Am 99% certain we couldn’t claim VAT, but just in case I’m missing some new tax lay any info would be appreciated.

JHMEG

Diesel gets all of the tax breaks, both in the form of lower excise (meaning it's cheaper at the pump) and being able to claim VAT back. You can't claim VAT back on petrol.

Berty

I drive a Bio-Ethanol using E85. Your accountant can claim back the VAT on the fuel but not on the petrol the Hybrid would use.

The MPG derived from a hybrid at cruising speed is actually not very good. It's only really good in urban settings.

Im laughing at the amount of times I have to fill up. Eventually it will dawn on them that filling the car 4 times per week is a false economy and they should really just buy a diesel for me.

As a repmobile. Don't even think about it unless you want to seriously save the world all by yourselves.

smcgiff

Cheers - thought as much guys!

Berty

smcgiff wrote: »

Cheers - thought as much guys!

However the Honda Insight says it can do up to 62.1 MPG which is fairly good.

Shame the back of it looks like a crappy old UK spec Corolla matched with a Audi A1.

smcgiff

Berty wrote: »

However the Honda Insight says it can do up to 62.1 MPG which is fairly good.

Shame the back of it looks like a crappy old UK spec Corolla matched with a Audi A1.

Yip that's the one I think we'll probably be going with. It's to give the business to the dealer as much as anything.

JHMEG

They seem to get better economy than the official figures without too much effort. I saw a video review shortly after they came out and the reviewer was getting 80mpg without trying too hard. Why am I surprised - my car has the same system and I always get better than the official figures.

Redsoxfan

Some more tax aspects to consider:

• Expensive cars 'disallowance'-when computing this addback for CT purposes, the lower the emissions, the lower the addback
• 20% VAT input credit on low emission cars leased/purchased since Jan 1 2009

R.O.R

Redsoxfan wrote: »

Some more tax aspects to consider:

• Expensive cars 'disallowance'-when computing this addback for CT purposes, the lower the emissions, the lower the addback
• 20% VAT input credit on low emission cars leased/purchased since Jan 1 2009

I haven't a clue what the first part relates to - if you could explain it to me from a non-finance point of view, I'd really appreciate it.

I've been advised that point 2 is fairly difficult to prove. You may get away with it, but if you are audited and can't 100% prove it, you could be in a bit of bother.

http://www.revenue.ie/en/tax/vat/refunds/vat-reclaims-faqs.html#deductible-vehicles

We make no mention of that to clients and leave it 100% up to them to decide if they want to claim the 20% VAT rebate, if they are aware of the possibility.

Redsoxfan

The first part:

When you are leasing a car, you are only write off so much of the lease cost for tax purposes-the limit used to be €24,000 or such, e.g.

Car value €45,000, annual lease costs €13,000

You expense €13,000 in your accounts

For tax purposes, you are limited to expensing €6,933 (€13,000 x €24,000/€45,000)

Under the new tax system, the €24,000 limit remains for 'low' emission cars, the limit for 'medium' emission cars is €12,000 and there is no limit for 'high' emission cars. So, the higher the emissions, the less of the leasing costs you can write off against tax.

As to the second point, as long as the car is within bands A-C and is being used chiefly for business purposes (i.e. business mileage is over 60% of total mileage), then you can claim a deduction of 20% of the VAT element of the lease payments against your VAT bill. If the car was purchased rather than leased, there is a clawback provision (if you dispose of the car within 2 years of purchase)

Note that we received professional advice on point 2 and I don't agree at all that it is 'difficult to prove' as long as your employees are primarily using company cars for business purposes (visiting clients/customers as opposed to driving into the office or heading to Galway for the weekend). Companies should be keeping mileage records for BIK purposes anyway and so the 60% test should be relatively easy to determine.

As always with tax, if in doubt, consult an accountant/tax advisor/the Revenue themselves (although in the latter case, different offices could tell you different things.....)