Self employed -purchasing a new Jeep. Tax considerations

bf

I'm self employed & need to go on to building sites in my line of work - as a result I'm considering buying a jeep.

The two I have narrowed it down to are a Land Rover Discovery Business Edition or a Volvo XC90.

As the Discovery is a "commercial" vehicle, are there any benefits of buying this - i.e. can I get the VAT back on diesel on this as its commercial, whereas I couldn't on the XC 90 as it is a passenger car?

Anything else I should be aware of?

Cheers

goz83

If VAT registered, you can claim the VAT on diesel. Otherwise, you can't. The other stuff, I don't know

SBPhoto

If VAT Registered you can claim VAT on the diesel for Jeep or Car. can't on petrol.

R.O.R

If you are VAT registered, you can reclaim all the VAT on the purchase of the Discovery as it is a commercial vehicle.

bf

bf wrote: »

....

Anything else I should be aware of?

Cheers

bik potentially if you are a director of your own company and the vehicle will be company owned.

air

If the Discovery is an N1 commercial with back seats then you're liable for the full BIK rates as if it were a car. The flat 5% BIK rate applies to vans only.
There's only a difference in the VAT treatment of the purchase price between it & the Volvo - VAT is only reclaimable on a small portion of the price of passenger vehicles IIRC.
So the cost to your company of the discovery will be quite a bit less than the Volvo but the ongoing BIK & tax costs would be broadly similar assuming a diesel Volvo.

bf

Thanks all - I should point out I am a sole trader so BIK doesn't apply - I just need to apportion costs between business & personal use.

Leasing seems an attractive route, but I doubt there are many leasing cos that would lease one vehicle to a self-employed person....

flamegrill

There's a good chance that you can commercially register the XC90. Ditto with an BMW X5 which is another option. This is down to the cubic litres of storage space in them. You'd to get the 5 seater model in both cases.

You probably have an accountant, make sure to ask them. I know several sole traders who bought new X5s over the last couple of years, registered them commercially and got 23% of VAT back. That's a huge whack on a car valued at 65-80k (no need to tell you I know!)

drunkmonkey

How did you get on in the end?

Thinking of doing something similar with a discovery sport, currently just charge the company mileage on my own car.
I could buy through my own company or myself as a sole trader also.
Not sure how to go about it, don't fancy being liable for bik. Would also like to get the 7 seater if possible.

Is the company you charge mileage to yours?
Regardless, you'll pay BIK on a company supplied vehicle you have personal use of.

bf

drunkmonkey wrote: »

How did you get on in the end?

Thinking of doing something similar with a discovery sport, currently just charge the company mileage on my own car.
I could buy through my own company or myself as a sole trader also.
Not sure how to go about it, don't fancy being liable for bik. Would also like to get the 7 seater if possible.

I didn't go ahead with either, never got comfortable with the VAT implications of a crewcab. In the meantime I've changed from being a sole trader to company.

I've a new XC90 due to land next week which i am buying personally, as when I tallied it up found out for me it was better form a tax perspective to charge mileage to the company.

Homer

bf wrote: »

I didn't go ahead with either, never got comfortable with the VAT implications of a crewcab. In the meantime I've changed from being a sole trader to company.

I've a new XC90 due to land next week which i am buying personally, as when I tallied it up found out for me it was better form a tax perspective to charge mileage to the company.

My accountant was of the same opinion.. Purchased my own commercial vehicle and I claim mileage every month at the civil service rate which works out more cost effective.

drunkmonkey

Augeo wrote: »

Is the company you charge mileage to yours?
Regardless, you'll pay BIK on a company supplied vehicle you have personal use of.

Yea it's mine but I also trade as a sole trader in another business.

Homer

Homer wrote: »

My accountant was of the same opinion.. Purchased my own commercial vehicle and I claim mileage every month at the civil service rate which works out more cost effective.

2 rows of seats presumably? IE not a two seater van/jeep.