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Land Rover CT Tax query

A friend works in an engineering business that travels around the UK fixing up aircraft. He needs a vehicle to carry tools, travel around in, and use for private means such as the school run, etc.

He is not keen on buying a Van (mostly for kids school run reason) so he had his heart set on a Land Rover Diesel. However I know that the HMRC classes these as cars for tax so he will likely suffer as a result. He was thinking of buying the car privately and using the company to fork out for a loan but I'm not sure how legit that is.

He also needs more tooling so he was thinking of using the loan to partially pay for that as well.

Whats the best course of action he could take for tax purposes? He's willing to consider other large cars, but because he needs space, it needs to be big without been a van.

Any help will be great! Thanks.
Luke Hector

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03rd Apr 2009 16:47

Cheers
Thanks for help everyone. Apparently he's now asked me about leasing a separate car in the company for sole use by the business. I've advised him on the new Corp Tax rules for Apri 2009 and he's fine now.

Thanks again!

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03rd Apr 2009 15:03

Seek advice

Your friend needs to sit down with someone who understands the company car and employment income tax position and go through the numbers, as there are a few factors to consider.

If he purchases the car personally and charges the approved mileage rates to the company, he'll have all the running costs and depreciation coming out of his own pocket. Would he need to take an additional salary from the company to cover this, therefore increasing their costs - PAYE, secondary NIC etc?

If the company purchases the vehicle and makes it available for private use, he'll have car and potentially fuel benefit increasing his tax liability. The company will get some assistance towards depreciation through capital allowances.

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By neileg
03rd Apr 2009 13:19

Options
Bear in mind that van benefit is now £3,000. A lower emission car could well be cheaper in tax terms.

He could own the vehicle privately and charge the company the approved milage rate. Tax free for him, tax allowable for the company.

What about a Mercedes Vito? Or any one of a number of MPVs?

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By Anonymous
03rd Apr 2009 12:47

Long Wheel Base Landrover
One of my clients buys long wheel base landrovers for the company and thus can (or could) reclaim the VAT.

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03rd Apr 2009 10:57

New Rules from 1 April 2009
I've just read the new vehicle corporation tax rules from 1 April 2009 regarding emmissions. Ok that explains a lot and gives me something to go on, however if this is going to be a vehicle used partially for business and partially privately are there other aspects like "company car" rules and "P11D Benefits in Kind" to consider?

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