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Company Van - private use & VAT

  • 27-01-2014 5:25pm
    #1
    Loire
    Registered Users, Registered Users 2 Posts: 2,036 ✭✭✭


    Hi,

    I'm self-employed and am thinking about buying a company van. I note from the Revenue.ie website that travelling to/from work is private use (http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/private-use-vans.html), so in my case, I think BIK of 5% of the Original Market Value would apply. A new van costing 18,495 would therefore result in me being taxed on the "extra" BIK income of 925 euro. I'm OK with that. The questions I have are

    Once I pay this BIK can I reclaim the VAT on all mileage / servicing even though I will in effect be using the van for personal use under Revenue guidelines?

    How many years can I depreciate the van over and what would the net effect be (assuming higher rate of tax)?

    Many thanks,
    Loire.


Comments

  • #2
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,685 ✭✭✭barneystinson


    Loire wrote: »
    Hi,

    I'm self-employed and am thinking about buying a company van. I note from the Revenue.ie website that travelling to/from work is private use (http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/private-use-vans.html), so in my case, I think BIK of 5% of the Original Market Value would apply. A new van costing 18,495 would therefore result in me being taxed on the "extra" BIK income of 925 euro. I'm OK with that. The questions I have are

    Once I pay this BIK can I reclaim the VAT on all mileage / servicing even though I will in effect be using the van for personal use under Revenue guidelines?

    How many years can I depreciate the van over and what would the net effect be (assuming higher rate of tax)?

    Many thanks,
    Loire.

    If you are self employed i.e. a sole trader, then BIK doesn't apply.

    You are entitled to recover the proportion of VAT that equates to your business usage of the vehicle.

    You can claim tax depreciation (capital allowances) over 8 years, again based on the proportion of business usage.


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