Purchase of an electric van

Tax efficiency for an electric van purchase that could be converted into a campervan

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If my company purchases an Electric Van costing £30k + VAT, my understanding is that I can:

  • Reclaim the VAT
  • Use either the AIA (if a van) OR 100% FYA (if a van or a car) to reduce taxable profits.  Is there any reason I would choose one or the other?
  • If a van and I use it for personal use then I believe I am charged - 80% of the Benefit of a normal van (£3,430)
  • If a van and I use it for only business use then 0% BIK
  • If it was deemed an electric car (see below) then irrespective of personal or business use it would be 0% BIK this year

At some point I'm thinking of turning this van into a mobile office which I can sleep in to save money on hotel bills when visiting clients and sites assuming we can travel again some day!

Would this then be a car or a van?!  Would the cost of conversion be allowable expense for the business?  Is there still a rule that if you order a van with side windows then its a car?  If its a car then I understand my business can't reclaim the VAT unless it can be proved it is only used for business.

Anyway thought I would post this little conundrum on minimising tax for your esteemed advice.  But before you recommend it I will be asking my accountant!  But interested in your views as I suspect it's not straightforward...

Replies (2)

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By frankfx
26th Nov 2020 18:02

The suffix, camper, means the van has been transformed.

Assuming that it was a van at the outset.

The HMRC and Coca cola tax case is worth a look.

If you look at the definition of van for BIK and VAT , which I assume you are aware of based on the detail you posted, then you know the answer.

The rules are on HMRC website.
Best you read and make your mind up.

Are you prepared for the VAT claw back? Of course you have to self assess the Vat.

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By baronmax
05th Dec 2020 16:08

Frank thanks for the reply and apologies for slow response. I will investigate the HMRC and Coca cola tax case and what VAT claw back means! As I mentioned the intention is to use this as a van first and then transform it at some point to a mobile office. If the definition means it moves from a van to an EV motorhome (still company owned) then could I assume zero BIK? Or what ever the rate is for an EV at that point...

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