Is a private reg plate a business expense?

query about business tax expenses

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I run a mobile dog grooming business and have just purchased a WA52 DOG number plate to go on our grooming van. Is this a legitimate business expense? Tax status is partnership with husband. Not a ltd co.

Replies (27)

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By Paul Crowley
13th May 2024 23:37

No
It is an asset not an expense. No capital allowances. CGT may be an issue.
Looking at the number, probably not expensive.

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RLI
By lionofludesch
14th May 2024 06:53

Capital allowances on the cost of the plate.

About £20.

Nothing for the right to use the number though, as Paul says, there's possible CGT on any profit you make on selling it.

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VAT
By Jason Croke
14th May 2024 07:33

Not VAT recoverable either as not classed as "advertising/marketing".

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Replying to Jason Croke:
Routemaster image
By tom123
14th May 2024 07:41

Interesting - I would never have thought you couldn't claim VAT on anything purchased relating to a company van?

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Replying to tom123:
RLI
By lionofludesch
14th May 2024 08:23

You can claim the VAT on the actual plate because the van needs one of those.

But it doesn't need the right to some clever prestige number.

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Replying to lionofludesch:
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By paul.benny
14th May 2024 08:56

Lots of things might not be necessary - livery on the van, for example. And since when has necessity of spend been a condition for recovering input tax.
I'm with Tom on being surprised that VAT recovery is blocked.

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Replying to paul.benny:
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By rmillaree
14th May 2024 09:30

ref vat treatment only

"I'm with Tom on being surprised that VAT recovery is blocked."

+1 here if one takes the viewpoint the expenditure is simply for business advertising purposes - the waggy dog nature of the plate number even kinda speaks for itself ref busIness purpose.

Infact croner go as far as saying (full text blocked unfortunately ) input vat recovery may be possible. This being then case i dont necessarily agree with Jason albeit clearly there is some hurdle to cross here ref there being alowability ref input vat claim (if input vat is charged). Note the text that is visible on croner makes distinction between number plate purchased on its own and when it comes with a car - the linked text confirms this is an accessory and not input vat blocked in the same manner as a car. Note as i dont have full text available i could be mising something that could perhaps block claim

https://library.croneri.co.uk/cch_uk/bvr/19-327

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Replying to rmillaree:
VAT
By Jason Croke
14th May 2024 10:19

That link gives a list of 3 cases where the Tribunal allowed VAT recovery, there are then 5 cases where Tribunal rejected recovery.

The theme is, as you have noted correctly, about direct links to the business. The successful cases had plates that refer to the business, there was also a sole trader who had a registration that was his name (Ho-02-PER) but proved that their restaurant was locally known as Hoopers.

The losing cases were a mixture of registration being the initials of the Director or in one case the business owner had the plate on his Bentley but accepted he never used it for work or parked it at work (thus losing the advertising argument).

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By Paul Crowley
14th May 2024 09:39

A company could claim allowances on depreciation of the intangible asset.
Never considered VAT, and not sure why it would be blocked for a number relevant to the business.

If it is a vanity plate, not relevant to business then I think it gets no allowance and could be a benefit in kind.

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VAT
By Jason Croke
14th May 2024 10:04

I didn't say the VAT was blocked (like the input tax block on cars), but perhaps did not explain myself well (the perils of posting whilst on a train).

The right to reclaim VAT on purchases is always only ever on the basis the purchases have a business purpose, so anything is in theory VAT recoverable but at the same time, you have to justify the business purpose/direct link to the business.

Take a garden office, VAT recoverable, yes, but on basis it is used "exclusively" for a business purpose, so a shed with a chair in it might not be allowed as it could have duality of purpose. Likewise with a cherished number plate, if your company is called ABC Ltd and you have a registration that says "ABC 1" then perhaps there is a direct link between that purchase and the business, but "WAG 1" could mean you are a footballers wife, doesn't directly link to a dog grooming business or maybe it does? My point was that it's not automatically okay to reclaim.

I've had a marketing client buy a Porsche 911 and argue it's a "pool car" successfully, I've had a farmer client buy a £6k hot tub and recorded it as plant & equipment and almost got away with it except the HMRC Officer didn't look at the huge list of £200k assets on the assets register, no, he looked at items £6k or less and when busted, farmer said he needed it to soothe his back after a hard days graft, but HMRC were having none of it.

But apologies of my earlier post came across as absolute.

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Replying to Jason Croke:
DougScott
By Dougscott
14th May 2024 12:21

Tell the farmer he needs a yurt on his farm with a hot tub.....

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By AndyC555
14th May 2024 11:49

Rather than the extortionate expense of getting a 'personalised' number plate, I just changed my name to HV16 TPG.

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Replying to AndyC555:
By Ruddles
14th May 2024 14:10

You been reading Top Tips in Viz again?

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Replying to Ruddles:
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By Paul Crowley
14th May 2024 15:39

Those top tips go back to the 1970s.
But a well placed joke works every time

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Replying to Paul Crowley:
By SteveHa
15th May 2024 13:41

I still have it on subscription. I got one over on them re the 2024 Annual, though, which they were advertising as "available at all good supermarkets (so not Sainsbury's, then)". I checked all the good supermarkets, including Sainsbury's, and couldn't find it at any.

I did eventually get it from Waterstones. Their last one in the shop, and because we were well into January, 1/2 price.

I should perhaps write to Letterbocks and tell them of my one-upmanship.

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By User deleted
15th May 2024 09:51

Thank you everyone for your comments. I seem to have opened a can of worms. I should've said that we are not VAT registered so our only options would be to set some or all of the cost (purchase, registration, making up the plates) against tax as a business expense. The entire spend comes to about £280. WA52 DOG is very relevant to our business, which is called Eds and Tails Dog Wash, and we had no issues with including the cost of the van's signwriting as a business expense. I thought the plate might be the same although I'm not sure if it comes under motoring or marketing in the grand scheme of things.

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Replying to User deleted:
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By Paul Crowley
15th May 2024 10:01

No allowance at all, because you are a partnership.
If it was a company you could have claimed a write off under the intangible rules.
Despite all that was discussed, your conclusion is so wrong as to be difficult to believe.

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Replying to Paul Crowley:
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By User deleted
15th May 2024 10:22

Wow. I'm not an accountant, I'm just asking a question. No need to be rude. I know quite a few groomers who have claimed for plates. Just wanted some clarification.

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Replying to User deleted:
DougScott
By Dougscott
15th May 2024 23:36

[quote=dalyanrobbi]

Wow. I'm not an accountant.

This forum is supposed to be for accountants to discuss technical issues and not for members of the public to seek accountancy advice. However if you read all the answers carefully then to summarise:

1) The physical costs of the plates could be regarded as a tangible fixed asset, part of the van. It is not an expense (nor is the van) but you can claim capital allowances on fixed assets.
2) The purchase of the unique registration number is also an asset, but what is called an intangible fixed asset (it's not a tangible physical thing). It's value is likely to remain about the same or maybe even go up, so people are telling you you can not claim any tax deduction for it. In fact they are saying you might have to pay capital gains tax if you sell it for more than you bought it....!

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Replying to User deleted:
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By Paul Crowley
15th May 2024 23:58

' I thought the plate might be the same although I'm not sure if it comes under motoring or marketing in the grand scheme of things.'
That is not what the panel has been telling you
I and probably others spent the time and looked things up.
IT IS NOT AN EXPENSE.
Your mates may have claimed it and not been caught. Not being caught does not mean the HMRC agreed the claim. It means that HMRC were not informed that a cherished number was hidden in the accounts somewhere.

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Replying to Paul Crowley:
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By Leywood
16th May 2024 12:35

Paul Crowley wrote:

Your mates may have claimed it and not been caught.

Yet!

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Replying to User deleted:
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By OrmeGoat
20th May 2024 09:03

Unfortunately you've discovered that too many accountants are just plain bloody rude.

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Replying to User deleted:
RLI
By lionofludesch
15th May 2024 10:04

dalyanrobbi wrote:

Thank you everyone for your comments. I seem to have opened a can of worms. I should've said that we are not VAT registered so our only options would be to set some or all of the cost (purchase, registration, making up the plates) against tax as a business expense. The entire spend comes to about £280. WA52 DOG is very relevant to our business, which is called Eds and Tails Dog Wash, and we had no issues with including the cost of the van's signwriting as a business expense. I thought the plate might be the same although I'm not sure if it comes under motoring or marketing in the grand scheme of things.

It doesn't say Eds and Tails to me. Could be any old Dog Wash. Tough to claim it advertises YOUR business.

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@enanen
By enanen
20th May 2024 08:44

Number Plates are an odd one as they are not owned by the title holder. The DVLA allows you to use the mark but not to own it. As we are aware they can remove and withdraw marks without query, and do. So does it more have the characteristics of goodwill/non value item?

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Replying to enanen:
RLI
By lionofludesch
20th May 2024 09:01

enanen wrote:

Number Plates are an odd one as they are not owned by the title holder. The DVLA allows you to use the mark but not to own it. As we are aware they can remove and withdraw marks without query, and do. So does it more have the characteristics of goodwill/non value item?

It should be recognised that the plate itself is one asset (on which capital allowances may be claimed) and the right to use the registration mark is another (an intangible asset which may be subject to CGT).

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By Andrewmoore777
20th May 2024 10:46

Years ago I had an almost identical argument on behalf of a client and lost before the (then) General Commissioners on the grounds that it was capital expenditure

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Replying to Andrewmoore777:
RLI
By lionofludesch
20th May 2024 11:08

Andrewmoore777 wrote:

Years ago I had an almost identical argument on behalf of a client and lost before the (then) General Commissioners on the grounds that it was capital expenditure

They were correct.

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