UK & Ireland Ineos Grenadier and UK HMRC BIK classifications for 2 and 5 seat Commercials

[chriscroft]

I have spent some time trying to understand this by talking to professionals, but it could be wrong

For a limited company, and only a limited company. (i.e, not a sole trader/partnership - this is different)
I have been told by my accountant who is a director of 100+ staff. He can make a mistake but they have been generally been very good in 30+ years we've used the company. But he could be wrong.

That for a 5-seater N1 Commercial
So long as I use it for some significant business use I can have the Capital allowances, because it is a Van N1; it was an M1 car I couldn't claim any capital allowances under current rules in most circumstances.

I may not be able to claim all the 20% Vat back because this should be prorated i.e if use it for 50%business; 50%non-business then I should only claim 1/2 the Vat back i.e 20/2= 10% of the VAT. But you have to pre-guess the usage split.

If I just once used the vehicle in that tax year for personal use, I would be due all the BIK liabilities for that tax year....But that could be split if 2 of us used it in that tax year. So long as both pay 1/2 the BIK each (or prorated)- i.e HMRC gat their full BIK somehow. The company does pay the BIK, do.
The N1 commercial treatment is different to an M1 car for a limited company. But you have to be fair and honest about this with HMRC.

But if you really never ever use the vehicle for BIK personal use; then BIK doesn't apply.

Please don't shout at me....

 

[Eric]

When 90% of the target market want to buy and run through their business, you really think when they realise this blunder there will be sufficient demand for them to trade over odds? Hmm....

It's a global market vehicle, and the bean counters will have done their homework to maximise global profits and not worry about individual winners and losers in a specific economy. Especially when market taxation rules in a country can change at the whine of their chancellor.

 

[JOB]

It's a global market vehicle, and the bean counters will have done their homework to maximise global profits and not worry about individual winners and losers in a specific economy. Especially when market taxation rules in a country can change at the whine of their chancellor.

Quite true, but I'm referring to a localised market issue, though no one from a RHD export market is going to be buying over list nearly new Grenadiers either.

 

[DaveB]

Seems pretty straightforward to me. If a car or a commercial vehicle is business use only all the VAT is recoverable by a properly registered business (its’ not always been this way). That means that if the Grenadier is classed as a car by HMRC you can still recover the VAT if usage is business only. The tricky bit is being able to demonstrate no private use. That’s where the pool car type is sometimes created to mask the real use or where the car is genuinely a pool car. Salary sacrifice for car operating costs might also be an option for some businesses.
Trickier still because for a lot of us with smaller own businesses the vehicle is also a lifestyle choice. For me I keep it simple. I buy the vehicle and charge business use to my business, I suffer no BIK and that way I get no challenge from HMRC, but do also suffer if I rack up heavy mileage. The official mileage rates also need updating for current fuel and running costs.

Vehicle disposal is also simple, no VAT to deal with but if the vehicle suffers heavy depreciation you pay, but if I’d put it into my business the business would pay, though it’s still my money so I take the cash hit either way. The Grenadier should suffer quite light depreciation so overall costs should be acceptable for what is an expensive vehicle. Defo better than a Range Rover.
I spent my working life in leasing - VAT and BIK important in the UK with the company car/perk position, total cost of ownership more important elsewhere. It’s is not a good plan to give HMRC a reason to investigate you.

So much easier here.
We just claim a percentage business use 30% - 60 % and that is what you claim back.
you should do a log book for 3 months and log all your trips.
If you have done 10,000 kms in those 3 months and 6,000 were for business use hen you can claim 60% of all costs from then on
That includes the tax etc
You also depreciate the value of the vehicle over 5 years or so.

 

[Davman]

That includes the tax etc
You also depreciate the value of the vehicle over 5 years or so.

Only up to the motor vehicle depreciation limit of $64,741. This means that any GST(vat) paid on the value of the vehicle over this limit cannot be claimed. Also any value of the vehicle over this limit cannot be claimed as depreciation, or as a motor vehicle expense via the log book method.
If the IG had a payload of over 1000kg, then this limit would not apply.

 

[Lancs Lad]

When 90% of the target market want to buy and run through their business, you really think when they realise this blunder there will be sufficient demand for them to trade over odds? Hmm....

This... another friend of a friend cancelled his order now...
I had it in a email black and white from Grenadier last june that 5 seat qualifies for BIK and VAT etc.

When they need to sell 75% of the UK sales as commercials and yet they now aren't "commercials" this is going to hurt.

Yes its a global world but Ive a horrible feeling this isn't going to end well...I watch with interest and sadness

Theres a glimmer of hope the new 4.5T commercial van limit will cover Hydrogen not just electric ..lets see.

 

[DaveB]

This... another friend of a friend cancelled his order now...
I had it in a email black and white from Grenadier last june that 5 seat qualifies for BIK and VAT etc.

When they need to sell 75% of the UK sales as commercials and yet they now aren't "commercials" this is going to hurt.

Yes its a global world but Ive a horrible feeling this isn't going to end well...I watch with interest and sadness

Theres a glimmer of hope the new 4.5T commercial van limit will cover Hydrogen not just electric ..lets see.

There is absolutely no way 90% of their target market want to buy through a business
Remember this is a global vehicle and the UK is just a percentage of their sales.
So people who want to buy a commercial vehicle with tax deductions in the UK is a small subset of a small subset.
My use case is not that important to you and your use case has little impact on me.
The vehicle is designed to be an overlander/daily driver/tower/general driver.
Not some kind of commercial company owned work vehicle.
Don't read the marketing blurb

 

[Lancs Lad]

There is absolutely no way 90% of their target market want to buy through a business
Remember this is a global vehicle and the UK is just a percentage of their sales.
So people who want to buy a commercial vehicle with tax deductions in the UK is a small subset of a small subset.
My use case is not that important to you and your use case has little impact on me.
The vehicle is designed to be an overlander/daily driver/tower/general driver.
Not some kind of commercial company owned work vehicle.
Don't read the marketing blurb

sorry this is a very UK specific issue, maybe needs moving to UK only.
That info is from my dealer not marketing blurb for what its worth...

The UK is intent on a path to electric only and screwing the car driver to death at the moment.
To say that you cant own a commercial focused 4x4 use it for work during the week and play at weekends and not pay van bik but you can swan about in a 70k plus electric porsche or tesla on basically zero tax is beyond a joke..

 

[JOB]

To say that you cant own a commercial focused 4x4 use it for work during the week and play at weekends and not pay van bik but you can swan about in a 70k plus electric porsche or tesla on basically zero tax is beyond a joke..

You've hit the nail on the head.

 

[DaveB]

sorry this is a very UK specific issue, maybe needs moving to UK only.
That info is from my dealer not marketing blurb for what its worth...

The UK is intent on a path to electric only and screwing the car driver to death at the moment.
To say that you cant own a commercial focused 4x4 use it for work during the week and play at weekends and not pay van bik but you can swan about in a 70k plus electric porsche or tesla on basically zero tax is beyond a joke..

Yes sorry
The markets are very different
In Australia a large equipped 4wd is an aspirational vehicle,
People look at it and think ... I want one.
Surely many people look at a Tesla and also say they want one but they all park next to each other in the car park

 

[Max]

Another latte?

 

[Lancs Lad]

Surely many people look at a Tesla and also say they want one

erm...no

 

[DaveB]

erm...no

Come on .........there must be someone who looks at a Tesla and wants one??
Surely
someone

 

[bemax]

Come on .........there must be someone who looks at a Tesla and wants one??
Surely
someone

Maybe one or two. Somewhere.
But definitely no more!

 

[Spjnr]

you can swan about in a 70k plus electric porsche or tesla on basically zero tax is beyond a joke..

Yeah UK driving laws seem increasingly knee jerk!

As for the Teslas and Porsches...Congolese children worked their asses off in the cobalt mines to make those cars! Don't knock em!

 

[ECrider]

anyone who brands their car models S, E, X & Y must be the full ticket - surely?

 

[Donny Grey]

This... another friend of a friend cancelled his order now...
I had it in a email black and white from Grenadier last june that 5 seat qualifies for BIK and VAT etc.

When they need to sell 75% of the UK sales as commercials and yet they now aren't "commercials" this is going to hurt.

Yes its a global world but Ive a horrible feeling this isn't going to end well...I watch with interest and sadness

Theres a glimmer of hope the new 4.5T commercial van limit will cover Hydrogen not just electric ..lets see.

Hi JOB,

Can you post that letter confirming the Grens Vat/Tax status?
Might come in handy when we’re all in court…

 

[Max]

Would the figures include the coming of the commercial dual cab ute? what about mining companies, that surely would have to be commercial?

 

[Lancs Lad]

Would the figures include the coming of the commercial dual cab ute? what about mining companies, that surely would have to be commercial?

In the UK we cannot see how the double cab pickup will be much difference, for starters its longer and hardly going to shave enough weigh off up top to bring it below the required pathetic threshold.

 

[Lancs Lad]

Hi JOB,

Can you post that letter confirming the Grens Vat/Tax status?
Might come in handy when we’re all in court…

CASE REFERENCE: ​

Hi

Thank you very much for contacting INEOS Automotive.

I can confirm that the 5 seat Station Wagon (Non Belstaff editions) is a commercial vehicle and qualifies for claiming back VAT and BIK.