Client recently purchases a VW camper conversion for £35,000.
The original vehicle when registered approx 18 months ago (before conversion) was a Volkswagen Transporter T30 Highline which had a retail value at that date of £27,000.
Which figure is used for calculating car benefit ?
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You have a client with a limited company which purchased a camper van as the company car and you need to calculate the car benefit?
Did the client ask you the tax implications before making the purchase? I don't understand why they put it through the company.
It'll be the list price of the original vehicle plus the cost of the conversion, ie a fortune.
You may struggle to find this information if it was bought second hand.
It'll be the list price of the original vehicle plus the cost of the conversion, ie a fortune.
You may struggle to find this information if it was bought second hand.
No it won't. That's just a fiction of your own invention. A notional list price applies in these circumstances. ie:
"the price which might reasonably be expected to be its list price if its manufacturer, importer or distributor (as the case may be) had published a price as the inclusive price appropriate for a car of the same kind sold,
- in the UK,
- singly,
- in a retail sale,
- in the open market,
- on the day immediately before the date of the car's first registration, and
- with accessories equivalent to the qualifying accessories available with the car at the time it was first made available to the employee." ITEPA 2003, s 124
I'd suggest the appropriate starting place was the £35,000 paid when the vehicle was 18 months old, and work back for the amount that vehicle prices depreciate from leaving the showroom to being 18 months old.
Notional? A fiction of your own invention, you mean?
I would respectfully suggest that list price + cost of conversion is a very reasonable method of arriving at the notional list price. Obviously, by the nature of the beast, there's no "right answer".
Notional? A fiction of your own invention, you mean?
Exactly!
However, your approach is most definitely producing the "wrong answer".
Let's take a soletrader that buys unassembled kit cars, assembles them and sells assembled kit cars. Now consider what the list price of the assembled cars should be. You say it is the cost of the kit, plus the soletrader's cost of assembling it. I think it's a lot more than that.
I'm not going to argue about the numbers.
There's no information on which to base an argument.
I'm not taking issue with any numbers. I'm taking issue with methodology.
So it is methodology that you are not arguing about; having argued about it previously.
The point is that the notional list price in the situation that the OP describes, must exceed cost (or first list price plus value added, measured at cost), and, indeed, is likely to be substantially more
The "VW camper" part of the question strongly suggested to me that what was once a van had had its construction converted to a form of mobile home; which has been decided to fall in the car camp. Perhaps I read too much into that?