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New van, super deduction or AIA

New vans bought and then converted into camper vans for hire.

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Hi all,

Thoughts on the below would be very much appreciated.

Client (Ltd company) is purchasing a number of new vans to convert into camper vans and then hire them out for a week or two weeks at a time to the general public.

Am I right in thinking that they can not claim Super deduction as the vans are being purchased to be hired out but they can claim AIA? 

Thank you for your thoughts.

Archie-Bald

Replies (7)

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By lesley.barnes
11th Sep 2021 18:51

A motorhome is treated as a car not a van. Therefore AIA isn't available nor is the super deduction.

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Replying to lesley.barnes:
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By Archie-Bald
12th Sep 2021 22:09

Hi lesley.barnes - thank you for the reply, some extra info below might (or might not) have a bearing on your thoughts:

The van (VW transporter panel van) conversion being carried out is simply to install a row of seats which turn into a bed and some windows, there is no kitchen or storage or toilet or high roof etc. The DVSA will not reclassify the vans as "Motor caravans" as they have not been sufficiently converted. At most they will re-classify them as a "van with side windows".

In addition to the above; a vehicle will not be treated as a car if it is ‘of a construction primarily suited for the conveyance of goods or burden of any description’. The key point is that the test is one of construction rather than the use to which the vehicle will be put. See Morris v R & C Commrs. The judge emphasised that the construction of the vehicle was what counted and not the use to which it was in fact put.

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Replying to Archie-Bald:
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By petercooperuk
12th Sep 2021 22:49

This is not an answer in and of itself, but to note.. what HMRC considers a van, car, or otherwise, and what the DVSA thinks, do not necessarily match up.

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Replying to Archie-Bald:
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By Tax Dragon
13th Sep 2021 10:08

Archie-Bald wrote:

The judge emphasised that the construction of the vehicle was what counted and not the use to which it was in fact put.

Specifically on this point, what you say is not at odds with what lesley.barnes is saying. In the case you cite, a vehicle constructed for leisure was used for transporting goods. There wasn't any conversion work recorded. Conversion is part of construction - that's the finding in the case that you get to by following the link lesley.barnes provides. Your clients are changing the construction. They're turning vans into cars (for income tax purposes).

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By lesley.barnes
13th Sep 2021 09:21

www.accountingweb.co.uk/tax/business-tax/rocky-road-ahead-for-vans-redef...

I think that putting a row of seats in that convert to a bed and windows clinches it. It's a car in HMRC eyes.

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Replying to lesley.barnes:
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By Hugo Fair
13th Sep 2021 14:49

"a row of seats .. that convert to a bed and windows"
Now that's what I call a niche market!

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By Archie-Bald
19th Sep 2021 06:41

Thank you everyone for your thoughts and the links - very helpful.

It appears the client can only claim 6% capital allowances on the purchase and conversion work on the vans through the Special rate pool but they can possibly claim all of the VAT back.

Not a great result but it is what it is. I doubt the client will want to go ahead. Maybe wait until VW has a decent electric van so we might be able to claim higher CA.

Thanks again.

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