Sole director/shareholder client bought Nissan Navara Pick up Double cab. These are being marketed as much more attractive than ordinary vans, as you could happily use them privately without feeling embarrassed (so the blurb implies).
I think I should be sending in a P11d for the fixed rate BIK for both van and fuel, as it would be difficult to prove client doesn't use this privately.
But am I being unduly harsh? I'm just pretending to be HMRC though.
What's your view?
Replies (26)
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Pick up means that currently still a van not a car
We BIK one of these on a director mainly because he is just so honest, asked a question he will tell the truth.
He is also the only director that does not own a car outside of the business
Directors tend not to choose the transit as van of choice
What evidence is there to support a claim that there is no private use? eg person has another vehicle(s); vehicle is kept at company premises; etc
Thought not.
And are you sure it qualifies as a van? (edit - cross posted with Paul C. If he says it's a van, I trust his expertise)
And are you sure it qualifies as a van? (edit - cross posted with Paul C. If he says it's a van, I trust his expertise)
TBH, I'm not convinced on this post Coca Cola. I suspect that HMRC will start questioning double cab pickups, before long, and it will need further tribunals to decide the issue.
What evidence is there to support a claim that there is no private use? eg person has another vehicle(s); vehicle is kept at company premises; etc
Thought not.
And are you sure it qualifies as a van? (edit - cross posted with Paul C. If he says it's a van, I trust his expertise)
To be fair, it doesn't need to be kept at the company premises, so no evidence required of that. And yes, twin cab pickups are (mostly at least) vans.
as always depends on facts , does client have another private vehicle, does cab insurance cover business use only
I always use a letter of representation with accounts declaration confirming what client tells me about various things , it starts " I confirm...etc".
It covers you, in the event of hmrc enquiry or client claim , and it saves time being a bloodhound asking for insurance documents etc ,
What's the client's view? I'd ask them if there's any private use, advise them of HMRC's approach to asking the same questions and then, provided I was happy, go with their answer.
Agree
Critical that client understands what is being done and agrees the premise on which action has been taken.
The Warrior my client uses looks just a bit too pristine. No little dents or building material debris.
Pickups are treated as commercial vehicles (vans) for VAT purposes, so you can reclaim the VAT on a pickup whereas you can't for a car.
Where vans are concerned, employee is permitted to drive to and from work, go to the supermarket on the way home and also do the occasional run to the tip.
I absolutely would consider that insurance should permit such journeys.
I tend to consider it a matter of scale.
I also think the definition as a van is based on the carrying capacity in the back so make sure he has not had a built in tool box installed or even in some cases a hard roof as this can reduce the available capacity below the limit and therefore potentially reclassify the van as a car.
Although not your question as it has been touched on by previous posters for the VAT reclaim make sure that the pick-up meets the 1 tonne rule. The addition of things like a cover for the back will reduce the payload of the vehicle and may push it below the 1 tonne payload threshold - if its high end will probably be ok however I've seen a few that just top 1t.
Can client install a tracker or use on of the mileage logger app things as evidence that there is no personal use?
(edit: apparently I take too long reading other tabs and to type as Wycher beat me to it!)
True a while ago I was looking at the specs on a VW pickup for a client and while most of the variants had a +1 Tonne payload the top of the range luxury version didn't, I'm guessing because of all the added extras, so worth checking.
As Paul indicates, there doesn't have to be NO private use. The test's a little bit more generous than that. Private use, other than ordinary commuting, just needs to be insignificant.
You're not here to do HMRC's job. You're here to do your job, which is to advise your client properly. If he doesn't P11D it when he should there will be penalties down the line. If he P11Ds it when he doesn't need to, he will be paying unnecessary tax and the company will be paying unnecessary national insurance.
Whether it is a car or van for bik purposes is currently governed by a (probably illegal*) HMRC concession in EIM23150, but given the Coca-Cola decision and HMRC's tendency to resile from their manuals when it suits them, I wouldn't place too much weight on the 1 tonne watershed. Pun unintended).
*See R (oao Wilkinson) v CIR for limitations on HMRC's power to give concessions.
Whilst it is quite true that HMRC are prone to changing thier minds, and ignoring their own guidance, when it suits them, I see no 'concession' in EIM23150. Rather, what we have is simply MRC's interpretation of the legislation. Whilst that interpretation might ultimately prove to be flawed, I would not go so far as saying that it is illegal.
Surely just for double cab posh pickups though, and not 200k mileage Vauxhall Vivaro vans?
why wouldn't you just buy an actual van if it was only for private use.....because it doesn't look good when you head to the family gathering etc.....I guess there will always be the exception, but like the use of phones/computers etc....it is inevitable there will be private use.....and i suspect significantly more than the incidental amount (if the person was to record those times)....
Agreed, you can sometimes argue that a proper van has no private use but harder to do with a double can pickup imo.
That would be 540 then. Not what you meant, I’m sure ;-)
But at least the initial 180 would have come as no surprise to some of the contributors above.