Registering a G as Commercial vehical
Hello All,
Has anyone ever tried to register their G wagon as a commercial vehical? My accountant is refusing to put the purchase of a G500 (yr2000) through my tax returns! I use it to visit off road renewable energy projects around the UK. Commissioning wind trubines, hydro plants, ground monut PV farms, etc. Mainly forest tracks in North wales, Lakes and Scotland.
Log book shows its PLG and DVLA will allow it to be changed to LG vehical status but my accountant says there is still no guarantee it could be elligable for 100% capital allowance.
Any thoughts or previous experiance???
Kind regards
Chris
No idea, but I guess some of the issue may depend on the percentage of personal use and percentage of business use.
Also with capital equipment such as IT purchases, I belive you can only write-off 25% of the value a year or something like that. But a vehicle may have residual value?
anyway here's the link:
https://www.gov.uk/capital-allowances
Do you operate as a sole trader or a limited company?
I have a limited company where I am the owner and sole employee and looked into idea of having a company car some time ago. It wasn't worth all the hassle. HMRC appears to have got wise to the idea and there are a lot of things to consider:
The capital allowances for vehicles with CO2 emissions over 110g/km (probably applies to your G500) is only 8% per year
There are National Insurance implications to having the benefit of a company car (likely to be expensicve on a G500)
Etc. Etc.
Personally I found it simpler to own the car myself and the company to pay me 45p per mile for business use. That's an allowable expense for the company and tax free for me.
But you probably need to use a spreadsheet to work out which way is cheaper.
If you do operate through a limited company I can thoroughly recommend an annual publication "Salary Versus Dividends" by Nick Braun at Tax Cafe. They publish a number of other books which gave me lots of ideas and also persuaded me that I didn't need an accountant. That saved me over £3,000 per year to conduct an audit and submit by company's corporation tax return. That was 20 years ago so, thinking about it, I've saved enough to afford that G63 on Autotrader.
If you're interested - www.taxcafe.co.uk
In the hay days of the G-Wagen introduction into the UK, these were brought in by Mercedes UK as Commerical vehicle whereby many farmer took advantage of tax releifs they got. In the eightys' M/Benz re-classifed the G-Wagen as passenger vehicle and the farmer tax relif was lost.
Thinking of it in a round about manner is to have a panel van G-Wagen which could classify as a commerical or remove the glass in the rear of your's and have it panneled, in which case you may be able to reclassify your G500 as a commerical.
This is only my opinion and not a qualifed one at that.
Yes but - the idea of panelling in a 2000 G500, especially if it's a RHD, would be sacrilege.
What would it do to the value?
.........Log book shows its PLG and DVLA will allow it to be changed to LG vehical status but my accountant says there is still no guarantee it could be elligable for 100% capital allowance.
I doubt that the DVLA will allow you to change the category as easily as that. For it to be classed as a light goods vehicle (which is basically a van) you would need to show that it was primarily designed for carrying a load not passengers. Generally that means removing the passenger seats, creating a flat load bed and blanking off the rear passenger windows. It should also be able to carry a load of 1000kg and the payload of the G if I remember correctly is only 750kg.
The main criteria the DVLA use for categorisation is what was the vehicle originaly constructed for not what it is actually being used for. It is unlikely an unmodified G500 would meet the LG classification.
I wasn't aware that you could claim 100% capital allowance on light goods vehicles unless they were zero emmissions and that only applies in the first year. The main rate for writing down on light commercial is 18%.
If the G is funded through your company and doesn't qualify as a light commercial then I expect that your BIK will be quite substantial based on the P11d value. I don't think it makes much sense to pay £600 plus a month in tax for a 20 year old vehicle !
If you do operate through a limited company I can thoroughly recommend an annual publication "Salary Versus Dividends" by Nick Braun at Tax Cafe. .....
If you're interested - www.taxcafe.co.uk
Thanks for this. I really wanted to use Company funds to subsidise a G500 purchase, but you are right the taxman doesn't like company cars any more. Better to borrow/buy yourself and expense allowable costs for any business. Note that 45ppm only just covers the basic fuel cost at 13mpg and cannot claim insurance/repairs separately (afaik). Having an asset in a limited company that is a 'benefit' means employee/NI implications and not worth the hassle. My accountant said you can list the company itself as the beneficiary/employee but then it complicated the Company tax return.
Pay your taxes, they fund our health service, our schools, emergency services, even the Royal Family
Pay your taxes, they fund our health service, our schools, emergency services, even the Royal Family
Believe me I do. More than most Ministers in government it seems! I am of course just talking about avoiding unnecessary taxation, and not evading it :)
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Many thanks for the advise, similar to what my accountant said. I will stick to 0.45p/mile.
Cheers and all the best