Hi Can anyone advise please.
If a person with not connection to company buys a commercial vehicle (small van) and charges rent to the company for business use of the vehicle should this be disclosed on an SA?
This person works part time PAYE for another company and does not usually complete SA. There is no monthly rental paid for the van but a monthly amount is transferred to a loan account within the company accounts until payment can be made.
Thank you in advance for any info.
Replies (13)
Please login or register to join the discussion.
Still charging rent
The individual is still charging rent. That they then choose to lend the money back to the company is surely irrelevant.
Well I thought
The original question still remains. If rent for a commercial vehicle is charged to a company from a private individual is a disclosure required on an SA if the rent is not paid but posted to a loan account with company.
Well I thought that I answered it. You seem to be making a point of the rental income being loaned back to the company, I would say this is irrelevant, it is still income so would of course be taxed.
Yes of course the income is taxable, net of capital,allowances presumably. What would you think it might not be?
Are you sure the individual and the company are not connected? In a normal hire agreement charges are paid monthly in advance. This arrangement sounds very one-sided, and not at all like the kind of arrangement two parties dealing with each other at arm's length would come to.
Well your question is fundamentally misleading as you said there was no connection but now you say the connection is the closest of all connections.
Rental income
Does that make any difference if there is no business relationship? I just want to know when the rental income should be disclosed on SA. When cash is received or as it accumulates in a loan account in the company.
I would say at the point it is earned I.e as it accumulates in the loan account
Principal
The company is getting tax relief so there has to be consequences for van owner otherwise we would all do it.
If the company borrows the money from the family member and buys the van there would be no tax issues and the company could claim capital allowances on the van and ofcourse reclaim the vat if co is vat registered.