UK & Ireland Commercial and VAT reclaim

[Tom D]

I will.
Its calculating the tax that is owing thats the tricky part.
Best case scenario I’ll pay the VED and OTR.
Worst case I’d pay OTR, VED, £10k VAT, and £9k pa in BIK.
Those fu**ers get enough from me as it is, you’ll forgive me for making sure that they get as little as is legally possible.

I calculated once the percentage of my business turnover that ended up with the tax man, it was a frightening exercise!
When you add up Corporation tax, PAYE, insurance tax, business rates, employers NI, employees NI, fuel duty, compulsory pension payments, and then stick our vat contribution on top its a lot!

 

[DaveB]

I will.
Its calculating the tax that is owing thats the tricky part.
Best case scenario I’ll pay the VED and OTR.
Worst case I’d pay OTR, VED, £10k VAT, and £9k pa in BIK.
Those fu**ers get enough from me as it is, you’ll forgive me for making sure that they get as little as is legally possible.

I calculated once the percentage of my business turnover that ended up with the tax man, it was a frightening exercise!
When you add up Corporation tax, PAYE, insurance tax, business rates, employers NI, employees NI, fuel duty, compulsory pension payments, and then stick our vat contribution on top its a lot!

Just tell your accountant to work it out and then claim it as a business expense.

 

[Lancs Lad]

First post and possibly my last one... like a few others i mistakenly took the previously quoted advice that it was a full commercial like all my pickups so run on "van bik" reading this thread I'm damn glad I didn't go any further than a reservation.

Going to chat with accountant as a last ditch attempt.
But few musings from our fleet experience. used to run VW Kombi's but advised not to as not got the "protected load space" since the coca cola ruling.
Been assured dual cab pickups currently OK . protected load areas and other reasons discussed above, but interesting to note this has caught manufacturers out, the VW canyon saga for one and ranger raptor.
Finally our accountant always advised against pool cars, unless vehicle back in the yard every night.Alaways said ita red flag to HMRc and they always dig in to that one.

And ref Gov agencys not talking to each other, thank heavens for that...arguing with a welsh copper late one night on teh A55 my Kombi was a car saved a court case.....the following week telling HMRC it was a truck..

 

[Jeremy996]

I think it is time to lock this thread as it is going in circles. Please stick to the argument and not playing the person.

If anyone wants a particular point making, not already here, please DM me first.

In summary and only for the UK, (the rules in Europe are less restrictive and a little more logical):

1. Whatever the DVLA state about vehicle taxation class is not binding on HMRC. Road Fund Licence / commercial or non-commercial speed limits are in the DVLA's competence, but little else is.
2. An M1 vehicle is a "car" for all intents and purposes.
3. An N1 vehicle can be a car or van. HMRC's default position is that it is a car.
4. An N1 2 seater Utility Grenadier is probably a van, but is not on the definitive list, (yet), but appears to meet all of the prior requirements.
5. An N1 5 seater Station Wagon is by the HMRC definition a car, as it fails the dual purpose vehicle test by being too heavy and fails the commercial test by having too low a payload.
6. Unless Ineos negotiate with HMRC nothing will change; even the double cab will be problematic.
7. Any prospective buyer who wants to recover VAT and reduce the Benefit In Kind, (BIK), costs needs to talk to their accountant/someone they can sue if they are wrong, as the penalty could be hugely expensive, (£10,000s+).
8. It has been suggested that as Ineos have taken the trouble to get the 5 seat SW tagged as commercial, it would be reasonable to assume that VAT and BIK were recoverable, so only back tax would be due on a disagreement with HMRC, not penalties, but I'd suggest this is a "thin ice" argument. HMRC have past form for being vengeful and difficult.
9. The "Pool Vehicle" rules will allow a company to own a 5 seater Grenadier and recover VAT/avoid BIK, but the rules are onerous and rigidly enforced.
10. Gary Pearson of Ineos Automotive provided a reply to my questions on 13/02/2023; you can see this on the thread "The Grenadier, HMRC and DVLA"