BIK on N1 Commercial 5 Seater Discovery

Yawlboy

Hi,

Is anyone running a 5 Seat Discovery (Utility) as a company vehicle? If so what BIK are you paying on it i.e. Is it 5% Commercial or Car based BIK?

I am getting conflicting advice from different sources and my accountant is reluctant to commit one way or the other.

Thanks in advance
YB

Bold Abdu

Yawlboy wrote: »

Hi,

Is anyone running a 5 Seat Discovery (Utility) as a company vehicle? If so what BIK are you paying on it i.e. Is it 5% Commercial or Car based BIK?

I am getting conflicting advice from different sources and my accountant is reluctant to commit one way or the other.

Thanks in advance
YB

To qualify for the 5% rate as a van, it needs to be a van.

As per Revenue
A van means a mechanically propelled vehicle which –

• is designed or constructed solely or mainly for the carriage of goods or other burden, and
• has a roofed area or areas to the rear of the driver's seat, and
• has no side windows or seating fitted in that roofed area or areas.

Where a crew cab or other similar type of vehicle meets all of these criteria it would be regarded as a van rather than a car – see Private Use of Company Cars regarding the meaning of 'car'.


So basically, no seats behind the driver seats.

The Dagda

Yawlboy wrote: »

Hi,

Is anyone running a 5 Seat Discovery (Utility) as a company vehicle? If so what BIK are you paying on it i.e. Is it 5% Commercial or Car based BIK?

I am getting conflicting advice from different sources and my accountant is reluctant to commit one way or the other.

Thanks in advance
YB

Apparently the Discovery 4 Utility IS classed as an N1 Commercial so it should allow you to calculate the BIK off the 5% rate.

There doesn't seem to be any clear information online to confirm this, so I'm guessing Landrover Ireland don't want to make too much noise about it in case Revenue close this apparent loop hole.

I've read that it may qualify due to the load bay length being a certain percentage of the wheelbase. Basically a crewcab with an enclosed body.

For clarification you should speak to a main dealer, and the confirmation would be on the log book where it would/should/could be classed as N1.

If you're looking at buying one, this website claims that you can buy a new one from UK/NI with a better spec and for "a lot less" money

http://www.luckwill.net/land-rovers/land-rover-discovery-4---uk-commercial-version-importing-into-ireland

Yawlboy

Its definitely an N1 - however the dealers are unable/unwilling to comment on the BIK status. I find it very strange that for VAT, VRT and Motor Tax its treated as a commercial but no one will confirm the BIK status.

The other strange thing is that the dealer reckons it should be NCT'd after 4 years not DOE'd every year!!!

I've asked my accountant to write to Revenue and get a formal ruling.

I've also spoken to Mitsubishi about the Pajero Executive 5 seater - they say its N1, VAT reclaimable, low VRT, €333 Motor Tax but full BIK!!!

The Dagda

Yawlboy wrote: »

Its definitely an N1 - however the dealers are unable/unwilling to comment on the BIK status. I find it very strange that for VAT, VRT and Motor Tax its treated as a commercial but no one will confirm the BIK status.

The other strange thing is that the dealer reckons it should be NCT'd after 4 years not DOE'd every year!!!

I've asked my accountant to write to Revenue and get a formal ruling.

I've also spoken to Mitsubishi about the Pajero Executive 5 seater - they say its N1, VAT reclaimable, low VRT, €333 Motor Tax but full BIK!!!

It seems to be a real "Irish" type situation, which means you won't get one definitive answer, just lots of different opinions.

You need to speak to someone who has one, and find out how to handle it. Maybe the motors thread would be a better place to ask?

I'd be amazed if you get written confirmation on this issue from Revenue. If you do, please let us know.

Mc-BigE

I'm also looking into one of these, but as my years km's wont be crazy my BIK as a company car could be 24 to 30% depending on yearly km's.

if my company is audit in say, 5 years time and revenue rule that i should have been paying car BIK and not van BIK, then on a 50000 euro landrover ,that could be a bill of over 60000! BIK (less the 5% van BIK i would of paid as a van)
and penalties and interest if they fell like making an example out of me.

Im not sure if im just looking for these landrovers on the road, but there seems to be a lot more of these around in 141 or 142 reg. so they must be selling.

is there any update on these, is there anything in writing that says for certain that its classed as a 5% or 30% BIK for company's.

thanks

Marcusm

Mc-BigE wrote: »

I'm also looking into one of these, but as my years km's wont be crazy my BIK as a company car could be 24 to 30% depending on yearly km's.

if my company is audit in say, 5 years time and revenue rule that i should have been paying car BIK and not van BIK, then on a 50000 euro landrover ,that could be a bill of over 60000! BIK (less the 5% van BIK i would of paid as a van)
and penalties and interest if they fell like making an example out of me.

Im not sure if im just looking for these landrovers on the road, but there seems to be a lot more of these around in 141 or 142 reg. so they must be selling.

is there any update on these, is there anything in writing that says for certain that its classed as a 5% or 30% BIK for company's.

thanks

I suspect recoverability of VAT is driving purchases more so than BIK considerations.

As regards BIK, it's hard to see how a 5 seat Disco is designed primarily for the trnsport of goods - I would have thought that this would require more space given over to goods. That being said, I understand lots of advisers are getting on the bandwagon promoting use of these vehicles, especially in the builder/developer segment.

veetwin

Mc-BigE wrote: »

I'm also looking into one of these, but as my years km's wont be crazy my BIK as a company car could be 24 to 30% depending on yearly km's.

if my company is audit in say, 5 years time and revenue rule that i should have been paying car BIK and not van BIK, then on a 50000 euro landrover ,that could be a bill of over 60000! BIK (less the 5% van BIK i would of paid as a van)
and penalties and interest if they fell like making an example out of me.

Im not sure if im just looking for these landrovers on the road, but there seems to be a lot more of these around in 141 or 142 reg. so they must be selling.

is there any update on these, is there anything in writing that says for certain that its classed as a 5% or 30% BIK for company's.

thanks

Bumping this thread to see if anyone can clarify what the situation with BIK is? McBigE did you end up getting one in the end? Test drove one today but no one seems to know what the tax/BIK position is.

Alan Shore

I'm not sure where the confusion is I think Revenue's view is clear if it's not a van then it's a car:
How the vehicle is treated depends on whether it falls within the definition of a 'car' or the definition of a 'van'.
Essentially, a 'car' means; any mechanically propelled road vehicle designed, constructed or adapted for the carriage of the driver or the driver and one or more persons other than (a) a motorcycle, (b) a van or (c) a vehicle not commonly used as a private vehicle and unsuitable to be so used. The definition of a car includes motorcycles over 410kgs.
A van means a vehicle which was designed or constructed solely or mainly for the carriage of goods or other burden, and which has a roofed area or areas to the rear of the driver's seat and no seats or side windows in that area.
Adapting say a four - seater crew cab (e.g. taking out the back seats) would not change the vehicle from being a car to a van, as subsequent adaptation cannot alter the original purpose of design or construction. Even with the back seats removed, the vehicle would still be classed as a car for benefit in kind purposes having regard to the original construction. If the vehicle does fall into the definition of a van, the vehicle is not automatically excluded from the benefit in kind charge. There will be no charge to tax, where all of the following conditions are satisfied:

veetwin

Alan Shore wrote: »

I'm not sure where the confusion is I think Revenue's view is clear if it's not a van then it's a car

The confusion for me at least is I see loads of these 5 seat Discoverys on the road. Some are taxed at the commercial rate, others are paying the private rate of c €1450. My question is are those paying the commercial rate paying BIK?

Yawlboy

veetwin wrote: »

The confusion for me at least is I see loads of these 5 seat Discoverys on the road. Some are taxed at the commercial rate, others are paying the private rate of c €1450. My question is are those paying the commercial rate paying BIK?

If they are company cars then they must be paying full BIK (according to my accountants) if not then they can be done for tax evasion.

veetwin

Yawlboy wrote: »

If they are company cars then they must be paying full BIK (according to my accountants) if not then they can be done for tax evasion.

And if they are bought by sole traders or company directors and used both for work and for personal use?

Alan Shore

veetwin wrote: »

And if they are bought by sole traders or company directors and used both for work and for personal use?

Sole traders don't pay BIK the amount of capital allowances will be restricted to €24,000.

Directors of companies are employees and pay BIK based on the OMV.

Mc-BigE

For me , it was too much of a risk. My accountant says 30% BIK every year. Thats too much for me.

Mc-BigE

just spotted this jeep grand cherokee from a dealer in cork, and at the bottom of the advert is this:

"THE JEEP GRAND CHEROKEE HAS NOW ATTAINED N-1 STATUS MEANING YOU CAN TAX IT COMMERCIALLY AND RECLAIM VAT IF YOU ARE VAT REGISTERED WHICH NOW MAKES THE JEEP GRAND CHEROKEE EVEN BETTER VALUE" (sorry about the caps, just cut and paste from the website!)

its typical ireland, where a car is a not a van , but is a van!

when will the goverment sort this whole BIK thing out?

Marcusm

Mc-BigE wrote: »

just spotted this jeep grand cherokee from a dealer in cork, and at the bottom of the advert is this:

"THE JEEP GRAND CHEROKEE HAS NOW ATTAINED N-1 STATUS MEANING YOU CAN TAX IT COMMERCIALLY AND RECLAIM VAT IF YOU ARE VAT REGISTERED WHICH NOW MAKES THE JEEP GRAND CHEROKEE EVEN BETTER VALUE" (sorry about the caps, just cut and paste from the website!)

its typical ireland, where a car is a not a van , but is a van!

when will the goverment sort this whole BIK thing out?

What is there for them to sort out, exactly?

Whether something can carry motor tax at commercial rates has nothing to do with how it should be treated for BIK purposes. A "van" for BIK purposes is something designed to carry goods and which has no seats behind the driver's seat. Phliosphically, there is a good reason why this should carry a lower BIK rate than a vehicle with multiple passenger seats - the reason being that it is of limited private use as it cannot carry a standard family around. Contrast that with the position of a 5 seat Discovery, crew cab or similar. Significant private use of such a vehicle can be made and the greater "benefit" is recognised in the higher amount of income deemed to arise from use of such a vehicle.

Mc-BigE

Marcusm wrote: »

What is there for them to sort out, exactly?

Whether something can carry motor tax at commercial rates has nothing to do with how it should be treated for BIK purposes. A "van" for BIK purposes is something designed to carry goods and which has no seats behind the driver's seat. Phliosphically, there is a good reason why this should carry a lower BIK rate than a vehicle with multiple passenger seats - the reason being that it is of limited private use as it cannot carry a standard family around. Contrast that with the position of a 5 seat Discovery, crew cab or similar. Significant private use of such a vehicle can be made and the greater "benefit" is recognised in the higher amount of income deemed to arise from use of such a vehicle.

I understand your point, that BIK is nothing to do with motor tax , commercial or private.

i just feel that if a N1 class vehicle is taxed the same as a 2 seater commercial van 333 euro, then by that logic revenue should also have BIK as 5% for N1. the same as a 2 seater van.

or else make N1 class private motor tax rates, if you are driving around with Wife and kids in the back.

Marcusm

Mc-BigE wrote: »

I understand your point, that BIK is nothing to do with motor tax , commercial or private.

i just feel that if a N1 class vehicle is taxed the same as a 2 seater commercial van 333 euro, then by that logic revenue should also have BIK as 5% for N1. the same as a 2 seater van.

or else make N1 class private motor tax rates, if you are driving around with Wife and kids in the back.

When an N1 is first presented for motor tax, you are required to provide a formal declaration that there will not be any private or non commercial use. If gu make that declaration truthfully, you would never expect to have your wife and kids in it. Irrespective of the validity of the motor tax, the VRT is at a reduced rate for N1 vehicles.

Separately, the BIK seeks to tax the benefit you get which is equivalent to a passenger vehicle not a van. If your employer forces you to use a Disco for work, simply avoid the BIK by eschewing any private use. Otherwise, settle down and pay is your only option.

Mini-E

Interesting thread this, as I'm looking at one of these 'type' of vehicles for an employee instead of a fully commercial without seats. Just curious about BIK

Could these vehicles not be classified as a van, as stated already the definition of a van...
"A van means a vehicle which was designed or constructed solely or mainly for the carriage of goods or other burden, and which has a roofed area or areas to the rear of the driver's seat and no seats or side windows in that area"

If these are classed as N1 vehicles could it not be argued that they have being designed mainly for carriage of goods. They do have a roofed area behind the drivers seat*** It says no where in this definition that there can be or can not be seats inbetween that roofed area and the drivers seat, it simply says behind the drivers seat(the carriage area is in fact behind the drivers seat) And there is no seats or windows "in that area" ***that area being the carriage area, or the boot.

I know these are not true vans in a traditional way, but given that definition could it not be argued that they are infact a van

Opinions please....

Marcusm

Mini-E wrote: »

Interesting thread this, as I'm looking at one of these 'type' of vehicles for an employee instead of a fully commercial without seats. Just curious about BIK

Could these vehicles not be classified as a van, as stated already the definition of a van...
"A van means a vehicle which was designed or constructed solely or mainly for the carriage of goods or other burden, and which has a roofed area or areas to the rear of the driver's seat and no seats or side windows in that area"

If these are classed as N1 vehicles could it not be argued that they have being designed mainly for carriage of goods. They do have a roofed area behind the drivers seat*** It says no where in this definition that there can be or can not be seats inbetween that roofed area and the drivers seat, it simply says behind the drivers seat(the carriage area is in fact behind the drivers seat) And there is no seats or windows "in that area" ***that area being the carriage area, or the boot.

I know these are not true vans in a traditional way, but given that definition could it not be argued that they are infact a van

Opinions please....

Are you suggesting that you interpret this as meaning that you expect to have rear seats but none directly behind the driver? That's not a reasonable construction of the words. As an employer, if you misreport the classification of the vehicle for BIK purposes, you will become liable not only for the employee's tax (the effective penalty for misfiring a P.11d) but also penalties or interest which would undoubtedly be of a similar amount.

That would be a silly exposure. If you need to run a crew cab and the employees don't want to pay the BIK then you need to ensure that there is no private use including no overnights at home.

Mc-BigE

Mini-E wrote: »

Interesting thread this, as I'm looking at one of these 'type' of vehicles for an employee instead of a fully commercial without seats. Just curious about BIK

Could these vehicles not be classified as a van, as stated already the definition of a van...
"A van means a vehicle which was designed or constructed solely or mainly for the carriage of goods or other burden, and which has a roofed area or areas to the rear of the driver's seat and no seats or side windows in that area"

If these are classed as N1 vehicles could it not be argued that they have being designed mainly for carriage of goods. They do have a roofed area behind the drivers seat*** It says no where in this definition that there can be or can not be seats inbetween that roofed area and the drivers seat, it simply says behind the drivers seat(the carriage area is in fact behind the drivers seat) And there is no seats or windows "in that area" ***that area being the carriage area, or the boot.

I know these are not true vans in a traditional way, but given that definition could it not be argued that they are infact a van

Opinions please....

I also was thinking the same way as you, ie the roofed,no windows goods part of the landrover disco is to the "rear" of the drivers seat and not directly behind the seat. but i would suggest that no one in revenue is going to agree with you. ( if they do and tell you in writing, then let us know!) but if your employee is caught with kids/wife in the back , then it might be hard to explain that one away.

Alan Shore

Mini-E wrote: »

Interesting thread this, as I'm looking at one of these 'type' of vehicles for an employee instead of a fully commercial without seats. Just curious about BIK

Could these vehicles not be classified as a van, as stated already the definition of a van...
"A van means a vehicle which was designed or constructed solely or mainly for the carriage of goods or other burden, and which has a roofed area or areas to the rear of the driver's seat and no seats or side windows in that area"

If these are classed as N1 vehicles could it not be argued that they have being designed mainly for carriage of goods. They do have a roofed area behind the drivers seat*** It says no where in this definition that there can be or can not be seats inbetween that roofed area and the drivers seat, it simply says behind the drivers seat(the carriage area is in fact behind the drivers seat) And there is no seats or windows "in that area" ***that area being the carriage area, or the boot.

....

Not sure how you are coming to the conclusion that no seats or windows behind the drivers seat could mean anything else.

Mini-E

No, just looking at the definition of a van.

Looking at this definition, does it not say that a van requires a roofed area behind the drivers area and this area should not have seats or windows.

Now looking at one of these N1 classed vehicles, strictly speaking could one not argue that there is an area behind the drivers seat (I'm talking about the boot area) that has no seats or windows. Just in the case of these type of N1 vehicles there happens to be seats INBETWEEN the drivers area and the carriage area.

Basically what I'm saying is it doesn't say in the definition that the carriage area HAS to be DIRECTLY behind the drivers seat

I realise this is bending the true definition but still, maybe this is the way people are getting around with paying the 5% bik??? Just thinking out loud here...

@marcusm, you seem to know your stuff in this area, am I talkin complete waffle here or are some people claiming these type of vehicles as vans???

There does seem to be abit of a grey area when it comes to these vehicles for me, I just bought a new van at ford and the ford sales guy told me the 4 seat Kuga was 5% BIK, (I was actually looking at the fully commercial kuga with no seats, so what he said got me thinking)... But thought I'd look into it a little more

Mini-E

Alan Shore wrote: »

Not sure how you are coming to the conclusion that no seats or windows behind the drivers seat could mean anything else.

Sorry missed this post, I'm saying that the definition doesn't say "that no seats or windows behind the drivers seat"

It says no seats or windows "in that area", that area being the carriage area, the boot! ......now I'm starting to confuse myself haha....

Mc-BigE

I think that clarity is needed from the revenue on this, its a grey area, van or crew cab/car?
but i would suggest that if they actually sat down and changed the wording for the definition of a van, im pretty sure that these N1 class commercials would be re-classed as "crew cabs" and full bik. unfortunately

54and56

Apologies for bumping this thread but it's the most relevant discussion of this topic I can find on Boards.

I'm in the market for a vehicle which will primarily be used for long journeys to meetings around the country requiring the transportation of work materials and tools.

If my company was to buy an N1 Commercial VW Touareg like this http://www.carzone.ie/used-cars/volkswagen/touareg/used-2015-152-volkswagen-touareg-cv-3-louth-fpa-200814629772588260 and I used it exclusively for work away from my office 80% of the time (I have an old TT I use for personal tipping around at weekends) would I legitimately be able to do the following:-

1. Claim back the VAT through the company?
2. Have the company pay all running costs of the vehicle i.e. tax, insurance, maintenance and diesel etc?
3. Pay no BIK (or possibly 5% BIK) rather than 30% BIK?


If not can someone explain why the car is certified as an N1 commercial vehicle but isn't treated for income tax purposes as an N1 commercial vehicle?

Mc-BigE

If you do lots of business mileage, then bik could be as low as 6% bik on company car/crew cabs.

Regarding your question, have a look at car pool section on the revenue's website http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/private-use-cars.html#section4

It explains what you need to do if your n1 commercial is to have 0 bik.

And unfortunately once the're seats behind the driver's seats , then revenue class it as a crew cab, and bik of a car. Yes stupid system, but that's why we live in Ireland.😠

Of course you could do what lots of people are doing and just ignore everything I just said above and drive away until your audited😉

Everything else wise, crew cab vrt, vat if your vat registered. And 333 road tax are all legit.

54and56

Thanks Mc-BigE,

I looked at the revenue definition of a Van (http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/private-use-vans.html#section3) and it says

"Meaning of "van"

A van means a mechanically propelled vehicle which –

is designed or constructed solely or mainly for the carriage of goods or other burden, and
has a roofed area or areas to the rear of the driver's seat, and
has no side windows or seating fitted in that roofed area or areas.

Where a crew cab or other similar type of vehicle meets all of these criteria it would be regarded as a van rather than a car – see Private Use of Company Cars regarding the meaning of 'car'."

An N1 registered 5 seat Touareg/Disco/Pajero crewcab seems to legitimately qualify as a van because:-

1. having such a large luggage area it is deemed to have been "constructed solely or mainly for the carriage of goods or other burden" (An important distinction is that the vehicle meets this requirement straight from the factory as opposed to removing a third row of seats from an originally manufactured passenger vehicle and retro certifying it as an N1 vehicle)

2. it does in fact have an appropriately large roofed area to the rear of the drivers seat (there is no prohibition on there being a 2nd row of seats between the drivers seat and the "appropriately large roof area" i.e. it doesn't say the roofed area has to be "immediately" behind the drivers seat.

3. it has no side windows or seating fitted in the defined roofed area.

Am I misinterpreting Revenue's definition?

Mc-BigE

I have pretty much being having this conversation in my head for the last 2 or 3 years ( yes I know, I don't have much of a life)

Are N1 5 seater commercials vans, or cars for bik purposes.

Best advice is ring the revenue and ask them because to me it's not clear. And get it in writing off them. My accountant has told me that it's classed as car for bik and van for everything else.

I don't do more lots of business mileage as I work mainly on site for one company , long term contract. So not willing to chance it

Marcusm

Je_suis_Jean wrote: »

Apologies for bumping this thread but it's the most relevant discussion of this topic I can find on Boards.

I'm in the market for a vehicle which will primarily be used for long journeys to meetings around the country requiring the transportation of work materials and tools.

If my company was to buy an N1 Commercial VW Touareg like this http://www.carzone.ie/used-cars/volkswagen/touareg/used-2015-152-volkswagen-touareg-cv-3-louth-fpa-200814629772588260 and I used it exclusively for work away from my office 80% of the time (I have an old TT I use for personal tipping around at weekends) would I legitimately be able to do the following:-

1. Claim back the VAT through the company?
2. Have the company pay all running costs of the vehicle i.e. tax, insurance, maintenance and diesel etc?
3. Pay no BIK (or possibly 5% BIK) rather than 30% BIK?


If not can someone explain why the car is certified as an N1 commercial vehicle but isn't treated for income tax purposes as an N1 commercial vehicle?

Income tax, in particular BIK, has no categorisation of a vehicle as N1. For BIK purposes the point is to assess the practicable benefit of its use to an individual. Vehicles which have no seats behind the driver are perceived as having more limited private use and attract a lower BIK charge. Vehicles with passenger seats aft of the driver all carry the same method of assessing the taxable benefit.

If I remember correctly, you have purchased a second hand Touareg? You are aware that the BIK is assessed on the original market value if the vehicle in Ireland, not what you paid for it?

If you make no private use of the vehicle then there is no taxable benefit. Prepare to be treated with scepticism and keep very comprehensive records if you follow this route.

Pooling arrangements for BIK will be irrelevant to you as a one man band company.

Marcusm

Je_suis_Jean wrote: »

Thanks Mc-BigE,

I looked at the revenue definition of a Van (http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/private-use-vans.html#section3) and it says

"Meaning of "van"

A van means a mechanically propelled vehicle which –

is designed or constructed solely or mainly for the carriage of goods or other burden, and
has a roofed area or areas to the rear of the driver's seat, and
has no side windows or seating fitted in that roofed area or areas.

Where a crew cab or other similar type of vehicle meets all of these criteria it would be regarded as a van rather than a car – see Private Use of Company Cars regarding the meaning of 'car'."

An N1 registered 5 seat Touareg/Disco/Pajero crewcab seems to legitimately qualify as a van because:-

1. having such a large luggage area it is deemed to have been "constructed solely or mainly for the carriage of goods or other burden" (An important distinction is that the vehicle meets this requirement straight from the factory as opposed to removing a third row of seats from an originally manufactured passenger vehicle and retro certifying it as an N1 vehicle)

2. it does in fact have an appropriately large roofed area to the rear of the drivers seat (there is no prohibition on there being a 2nd row of seats between the drivers seat and the "appropriately large roof area" i.e. it doesn't say the roofed area has to be "immediately" behind the drivers seat.

3. it has no side windows or seating fitted in the defined roofed area.

Am I misinterpreting Revenue's definition?[/QUOTE]

absolutely you are misinterpreting it; there are clearly seats behind the drivers seat. Additionally, it is clearly not a vehicle constructed to carry goods/burden as opposed to passengers. You are flogging a dead horse and likely being misled by the numerous dealers who don't know their Arse from their elbow in this arena.

unklerosco

As much as people would love to think they can get a discovery and pay 5% BIK they're living in dreamland. It's far clearer on the revenue website now that it was a couple of years ago (even at that it's still not that clear).

This is a van


These are not




It's quite simple.. If you want a toureg or discovery and want to pay 5% BIK, take out the back seats, remove the windows, weld in a metal floor etc.



As much as I'd like to get a shiny nice new jeep and pay 5% BIK I for one won't be pissing off revenue... Anyways, I fount it easier to just claim mileage allowance on my own vehicle. Financially it worked out far better for me.

Mc-BigE

I've heard of people trading in there 151 land rover's for a 161 Landrover before it's serviced. I suppose this would be expensive and suspicious to the revenue.

Mc-BigE

Marcusm, you mentioned that you do a lot of travelling for work, what kind of travelling Kms to you do a year?
if its 48001 or over, then you can buy any car, not just a N1 5 seater commercial.

also the civil servants mileage and subsistence route would be something to look into, only if you are actually doing the mileage. ie can backup your expenses sheet with proof that you were actually here, visa statement, hotel bills, name of site or office and a contact for your meeting/surveying etc.

Revenue have been all over this over the last few years.

Marcusm

Mc-BigE wrote: »

Marcusm, you mentioned that you do a lot of travelling for work, what kind of travelling Kms to you do a year?
if its 48001 or over, then you can buy any car, not just a N1 5 seater commercial.

also the civil servants mileage and subsistence route would be something to look into, only if you are actually doing the mileage. ie can backup your expenses sheet with proof that you were actually here, visa statement, hotel bills, name of site or office and a contact for your meeting/surveying etc.

Revenue have been all over this over the last few years.

I think you have me confused with someone else; I have been a man of leisure for half a decade but just about ready to get back to work. I did travel a lot for work but more like 250,000 miles a year in a thin tube!

54and56

I haven't made a purchase yet so am trying to get a clear understanding of this.

Marcusm wrote: »

there are clearly seats behind the drivers seat.

I'm don't understand how that is relevant. Revenues definition of a van doesn't mention or prohibit having a second row of seats, see http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/private-use-vans.html#section3. They quite specifically state that "Where a crew cab or other similar type of vehicle meets all of these criteria it would be regarded as a van rather than a car".

The main question seems to be whether the vehicle meets the definition of being "designed or constructed solely or mainly for the carriage of goods or other burden". The inclusion of the term "other burden" seems to be quite discretionary. In my case "other burden" would be tools etc I need to carry out my job and if the vehicle has been certified as an N1 commercial by Revenue I fail to see how they can speak out of both sides of their mouth at the same time i.e. one section of revenue classify the vehicle as an N1 commercial vehicle for VRT purposes and another section of revenue treat it as a car for BIK purposes.

If I do purchase one of these 5 seat commercial vehicles and only use it for commercial purposes away from my office 80% of the time I think I'd have a strong case to challenge any assessment of full BIK.

Mc-BigE

Sorry Marcusm, wrong person , my bad.
Je_suis_jean,

from the revenues website (which i know you know already):
"A van means a mechanically propelled vehicle which is designed or constructed solely or mainly for the carriage of goods or other burden,
and has a roofed area or areas to the rear of the driver's seat,
and has no side windows or seating fitted in that roofed area or areas."

i see what your thinking, i.e. that the space behind the passengers seats at the back is the van section. and then from that defining the vehicle as a "Van"

i would seek clarification from revenue before you spend your companies money and then if audited, get caught with a 15000ish euro BIK bill for each year you have it plus penalties.

if they class the touareg 5 seater as a van then go for it.

but i dont think they will give you a straight answer, just quote you the website definitions of "vans" and "cars" for BIK purposes

let us know how you get on.

Marcusm

Je_suis_Jean wrote: »

I haven't made a purchase yet so am trying to get a clear understanding of this.

I'm don't understand how that is relevant. Revenues definition of a van doesn't mention or prohibit having a second row of seats, see http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/private-use-vans.html#section3. They quite specifically state that "Where a crew cab or other similar type of vehicle meets all of these criteria it would be regarded as a van rather than a car".

The main question seems to be whether the vehicle meets the definition of being "designed or constructed solely or mainly for the carriage of goods or other burden". The inclusion of the term "other burden" seems to be quite discretionary. In my case "other burden" would be tools etc I need to carry out my job and if the vehicle has been certified as an N1 commercial by Revenue I fail to see how they can speak out of both sides of their mouth at the same time i.e. one section of revenue classify the vehicle as an N1 commercial vehicle for VRT purposes and another section of revenue treat it as a car for BIK purposes.

If I do purchase one of these 5 seat commercial vehicles and only use it for commercial purposes away from my office 80% of the time I think I'd have a strong case to challenge any assessment of full BIK.

There is a single roofed area behind ther driver seats; it contains further seats and windows as well as a space where goods can be carried. I am unsure if English is your first language but it is quite clear that the vehicles you are considering do not meet the requirements to be treated as a van.

I think your confusion is caused by the VRT and motor tax requirements and the registration of an N1 vehicle. These are simply irrelevant.

If your use is only 80% then you will have a full BIK charge subject only to mitigation by the amount of your business mileage. I suspect you will proceed and that it will only become an issue in the event that you are audited. It's not however in accordance with the Boards charters to continue that sort of discussion.

I do not believe that you have a return filing position for the proposed approach in which event you will have personal issues if you sign the tax return.

54and56

Marcusm wrote: »

There is a single roofed area behind ther driver seats;

I'm not sure how you figured that out but you're wrong. There are two distinct areas behind the drivers seat. #1 is a roofed area with seats, side doors and windows in it. # 2 is a roofed burden carrying area totalling 580 litres with no windows, no seats and a top hinged rear door.

Marcusm wrote: »

I am unsure if English is your first language

Ooohhh, who took the jam out of your doughnut?

Marcusm wrote: »

it is quite clear that the vehicles you are considering do not meet the requirements to be treated as a van.

If it's as clear as you say why are revenue certifying 5 seat Touaregs and Discoveries as N1 commercial vehicles?

Marcusm wrote: »

I think your confusion is caused by the VRT and motor tax requirements and the registration of an N1 vehicle. These are simply irrelevant.

How is the fact revenue themselves certify 5 seat Touaregs and Discoveries etc as N1 commercials not relevant?

Marcusm wrote: »

If your use is only 80% then you will have a full BIK charge subject only to mitigation by the amount of your business mileage.

Is English your fist language Marcusm? I didn't say my use of the vehicle would be 80% I said I'd exclusively use it for work purposes only (for those who struggle with English as a first language "exclusive" in this context means 100% ) and I'd be away from my office 80% of the time.

Despite your sarcastic comments and tone I do find your input useful, so thanks.

It seems to me that in order to have a nice 5 seat vehicle for business use without incurring BIK there is a two step process to go through as follows:-

1. Ensure the vehicle qualifies as a van. To do this it must

- be designed or constructed solely or mainly for the carriage of goods or other burden and

- have a roofed area or areas to the rear of the driver's seat, and

- have no side windows or seating fitted in that roofed area or areas.

My reading is that if a vehicle has been certified N1 commercial by revenue then it's a van and not a car.

2. Although your 5 seat vehicle has been classified by revenue as an N1 commercial it doesn't mean you can swan around in it for personal/family use without attracting BIK. If you want your company to pay for the vehicle (it can reclaim the VAT) and pay all maintenance, insurance, diesel etc AND you want to avoid having to pay any BIK you must ensure you only use the vehicle for business purposes and you must ensure you adhere to the following criteria:

- the van is supplied by the employer to the employee for the purposes of the employee's work, (I'll have a management meeting with myself and decide that all employees (me) must use company rather than clapped out personal cars for work purposes as this projects a better image of the company and is part of the companies marketing strategy. U]tick[/U

- the employee is required by the employer to bring the van home after work (I'll have another meeting with myself and negotiate an agreement whereby employees (me again) will have to bring the van home after work as it will be safer parked in a residential home than in an empty unsecured office park. U]tick[/U)

- apart from travelling from work to home and back to work, other private use of the van by the employee is forbidden by the employer, and there is in fact no other private use, (I'll only use the vehicle for work purposes and my old TT for personal use. U]tick[/U)

- in the course of his or her work, the employee spends at least 80% of his or her time away from the premises of the employer to which he or she is attached. (Easily done. U]tick[/U)

The above is my reading of the somewhat ambiguous guidance on revenue.ie.

Marcusm

Je_suis_Jean wrote: »

I'm not sure how you figured that out but you're wrong. There are two distinct areas behind the drivers seat. #1 is a roofed area with seats, side doors and windows in it. # 2 is a roofed burden carrying area totalling 580 litres with no windows, no seats and a top hinged rear door.

Ooohhh, who took the jam out of your doughnut?

If it's as clear as you say why are revenue certifying 5 seat Touaregs and Discoveries as N1 commercial vehicles?

How is the fact revenue themselves certify 5 seat Touaregs and Discoveries etc as N1 commercials not relevant?

Is English your fist language Marcusm? I didn't say my use of the vehicle would be 80% I said I'd exclusively use it for work purposes only (for those who struggle with English as a first language "exclusive" in this context means 100% ) and I'd be away from my office 80% of the time.

Despite your sarcastic comments and tone I do find your input useful, so thanks.

It seems to me that in order to have a nice 5 seat vehicle for business use without incurring BIK there is a two step process to go through as follows:-

1. Ensure the vehicle qualifies as a van. To do this it must

- be designed or constructed solely or mainly for the carriage of goods or other burden and
- have a roofed area or areas to the rear of the driver's seat, and
- have no side windows or seating fitted in that roofed area or areas.

My reading is that if a vehicle has been certified N1 commercial by revenue then it's a van and not a car.

2. Although your 5 seat vehicle has been classified by revenue as an N1 commercial it doesn't mean you can swan around in it for personal/family use without attracting BIK. If you want your company to pay for the vehicle (it can reclaim the VAT) and pay all maintenance, insurance, diesel etc AND you want to avoid having to pay any BIK you must ensure you only use the vehicle for business purposes and you must ensure you adhere to the following criteria:

- the van is supplied by the employer to the employee for the purposes of the employee's work, (I'll have a management meeting with myself and decide that all employees (me) must use company rather than clapped out personal cars for work purposes as this projects a better image of the company and is part of the companies marketing strategy. U]tick[/U
- the employee is required by the employer to bring the van home after work (I'll have another meeting with myself and negotiate an agreement whereby employees (me again) will have to bring the van home after work as it will be safer parked in a residential home than in an empty unsecured office park. U]tick[/U)
- apart from travelling from work to home and back to work, other private use of the van by the employee is forbidden by the employer, and there is in fact no other private use, (I'll only use the vehicle for work purposes and my old TT for personal use. U]tick[/U)
- in the course of his or her work, the employee spends at least 80% of his or her time away from the premises of the employer to which he or she is attached. (Easily done. U]tick[/U)

The above is my reading of the somewhat ambiguous guidance on revenue.ie.

Firstly, my inquiry with respect to language was not intended to be sarcastic (nor snide nor snarky); I should have realised that as you called yourself "Je suis Jean" rather than "Je m'appelle Jean" that your moniker was not to be taken as an indication as an indication of nationality, language etc. Now that you have made your position clear, permit me to be a little more blunt..

A "van" is not synonymous with "N1 commercial vehicle classification" and that is simply a fact. Had it been intended that they be synonymous then there would simply be a common definition or the VRT and motor tax definition of a N1 vehicle would be used. It is not and you have no statutory authority to infer it. THere is a single roofed area behind the drivers seats in the vehicles you cite. This is not a Transit/MAster/Sprinter with a seated area and a segregated goods area. It is simply a 5 seater with a metal plate across the boot to make it flat. To suggest that it is otherwise is misguided.

I do not think that there is any ambiguity with respect to the classification of a Discovery or Touareg with 5 seats, they are simply a car for BIK purposes. Simply put, the reason you will fail is that the purpose of the different percentages applying is to acknowledge the fact that private use of a vehicle with a limited number of seats (2/3 as opposed to 5 or more) by its nature means that such private use is inherently less valuable to the employee and thus the imputed income arising from such use should be measurably less.

This is what has led to the current situation where radically different percentages apply. Historically, Revenue would have looked kindly on van drivers who had private use recognising that, as civil servants, they would not be see dead driving a panel van or converted Golf/Focus without rear seats. On the other hand, a 5 seater SUV (which up until recently would have been the usual number of seats for SUVs) would be exactly the sort of vehicle for which they would expect to extract the maximum amount tax on the imputed income.

As regards your comments vis a vis home base, office and the meetings you will have with yourself, these will all be irrelevant in the event you are audited. They will not provide any evidence whatsoever. The real question is why the business would bear the cost of a 5 seater SUV other than for your convenience? It does not sound as if there are employees to ferry about. This will be a killer for you in any attempt to pull the wool.

54and56

Marcusm wrote: »

The real question is why the business would bear the cost of a 5 seater SUV other than for your convenience?

Because whilst it's acceptable for your plumber to arrive to a meeting in a Ford Transit it is not perceived to be acceptable (rightly or wrongly) for someone providing a ( ) service to arrive to a potential client or client in a Ford Transit. A "premium" SUV as they are often referred to projects confidence and that can land a lot of business thus paying for itself many times over.

As long as I maintain my own personal/family car and use the N1 commercial for nothing other than business use away from the office 80% of the time how would an audit determine I was using it for personal use?

unklerosco

Marcusm wrote: »

The real question is why the business would bear the cost of a 5 seater SUV other than for your convenience? It does not sound as if there are employees to ferry about. This will be a killer for you in any attempt to pull the wool.

Was just about to say the same myslef, if you are a sole trader and it's just yourself you'll have a heck of a time justifying a 5 seat discovery over a 2 seat commercial discovery... Even if you're a director and you've another director you'd still have the same issue... Again, even if you employ 5 people but they're all office based you'd have the same issue..

Now if you're a builder and you employ a couple of lads and you need to pick them up on the way to the jobsite each day you'd be far better able to justify the need for 5 seats...

Regardless, if you want a definitive answer ring revenue

unklerosco

Je_suis_Jean wrote: »

As long as I maintain my own personal/family car and use the N1 commercial for nothing other than business use away from the office 80% of the time how would an audit determine I was using it for personal use?

Because Revenue aren't idiots...

Mc-BigE

Sounds like you've made up your mind that you want a 5 seater utility regardless of the grey area of BIK.

Would it not make more sense to double check with revenue first via email or phone (anonymously if you want)
to see if the N1 5 seater is classed as a "van" for your own business circumstances

54and56

unklerosco wrote: »

Was just about to say the same myslef, if you are a sole trader and it's just yourself you'll have a heck of a time justifying a 5 seat discovery over a 2 seat commercial discovery... Even if you're a director and you've another director you'd still have the same issue... Again, even if you employ 5 people but they're all office based you'd have the same issue..

Now if you're a builder and you employ a couple of lads and you need to pick them up on the way to the jobsite each day you'd be far better able to justify the need for 5 seats...

Regardless, if you want a definitive answer ring revenue

That's a fair point and the reason I'd prefer the 5 rather than 2 seat version is that in my business I sometimes offer to collect and drive clients to meetings (this helps build the relationship) and that typically involves transporting more than one person so being limited to an ability to carry just one more person would be counter productive.

54and56

unklerosco wrote: »

Because Revenue aren't idiots...

I absolutely agree with you and I've no intention of treating them as such but I do want to know in what way I'd be liable to BIK if for the reasons I've already laid out I can show it is beneficial to the business for me to be driving a 5 seat SUV which I use exclusively for work and am away from the office 80% of the time?

I assume that despite the fact Revenue make and enforce the rules they do in fact have to adhere to them and can't just infer personal use/benefit unless they can actually prove it. Maybe I'm wrong.

54and56

Mc-BigE wrote: »

Sounds like you've made up your mind that you want a 5 seater utility regardless of the grey area of BIK.

That would certainly be my preference rather than lashing out a higher amount of already tax paid money to purchase a passenger version of the same vehicle and then claim mileage as despite the fact I'm out of the office at least 80% of the time I don't actually do a huge amount of mileage annually, it's mostly around and within the M50 with the odd trips to Cork, Galway etc thrown in.

Mc-BigE wrote: »

Would it not make more sense to double check with revenue first via email or phone (anonymously if you want)
to see if the N1 5 seater is classed as a "van" for your own business circumstances

I didn't know you could get a definitive ruling from Revenue on an anonymous basis. Is there a special email or phone number for that service or is it the main contact number/email address?

Also, the reason I'd like to do it anonymously is I'd be concerned that an overt enquiry would somehow result in a revenue audit shortly after and whilst I wouldn't be worried about the outcome I just don't need the time distraction or the cost of paying my Accountant to facilitate. I know revenue audits can happen at any time and that's life but I don't want to do anything which might precipitate one either!!

SRASE

In my opinion it is a car as it has roofed seating to the back. The VRT rating is irrelevant as it is completely separate legislation that covers the VRT rating. VRT N1 rating does not certify there are no seats to rear of drivers seat.

If the car is used exclusively for business purposes and any personal use was prohibited then BIK would not apply regardless of whether it was a car or a van. BIK applies where the car is made available to employee for personal use. Revenue do not have to prove actual personal use of car. Travel to and from your normal place of business would be considered personal use.

unklerosco

Je_suis_Jean wrote: »

I didn't know you could get a definitive ruling from Revenue on an anonymous basis. Is there a special email or phone number for that service or is it the main contact number/email address?

What I've done before is ring and just say I'm looking at starting a business and am wonder XYZ.. I've never been asked for any information. But be warned, getting a definitive answer of revenue ain't easy.. at least from my experience. No one ever want's to be responsible for giving out incorrect information so I've found they just give out incomplete information.. deliciously frustrating.

54and56

SRASE wrote: »

In my opinion it is a car as it has roofed seating to the back. The VRT rating is irrelevant as it is completely separate legislation that covers the VRT rating. VRT N1 rating does not certify there are no seats to rear of drivers seat.

I just don't get this, where in any of revenues guidance does it say that a van cannot have more than one row of seats? As far as I've been able to ascertain the guidance is totally silent in relation to the number of seats. It simply says that

"A van means a mechanically propelled vehicle which –

is designed or constructed solely or mainly for the carriage of goods or other burden, and
has a roofed area or areas to the rear of the driver's seat, and
has no side windows or seating fitted in that roofed area or areas.

Where a crew cab or other similar type of vehicle meets all of these criteria it would be regarded as a van rather than a car – see Private Use of Company Cars regarding the meaning of 'car'."

How does having a second row of seats invalidate the fact it has a roofed area to the rear of the drivers seat which has no side windows etc? If the legislation meant that the roofed area had to be immediately behind the drivers seat wouldn't it say that? How hard would it have been to add the word "immediately" into the guidance?

SRASE wrote: »

BIK applies where the car is made available to employee for personal use.

Correct, so if the vehicle is not made available for the personal use of the employee then no BIK is payable.

SRASE wrote: »

Revenue do not have to prove actual personal use of car. Travel to and from your normal place of business would be considered personal use.

Not true. The following is taken directly from revenue.ie


"No taxable benefit will arise in respect of the private use of company van where all of the following conditions are met: -

the van is supplied by the employer to the employee for the purposes of the employee's work

the employee is required by the employer to bring the van home after work apart from travelling from work to home and back to work, other private use of the van by the employee is forbidden by the employer, and there is in fact no other private use

in the course of his or her work, the employee spends at least 80% of his or her time away from the premises of the employer to which he or she is attached."

Were you aware of the above when responding to the thread or is there some other guidelines you are relying on which I should be aware of? (genuine question)

54and56

unklerosco wrote: »

getting a definitive answer of revenue ain't easy.. at least from my experience. No one ever want's to be responsible for giving out incorrect information so I've found they just give out incomplete information.. deliciously frustrating.

Also deliciously ambiguous which leaves plenty of room for interpretation and isn't that (on a much grander scale) how leading tax advisors make their €'s by driving a horse and coach through carelessly or sloppily defined tax regulations??