Sole trader claiming for vehicle bought by wife

Didn't find your answer?

My husband is moving from his limited company to a sole trader due to restrictions by his new contractor. His current van is registered to his limited company can no longer be used for him as a sole trader.

He will dispose of this van and we are looking to purchase a new van on a commercial agreement as a sole trader. 
 

However, I will need to finance this through part deposit/part loan as he has been advised he won't get credit due to no proof of income as he has just become a sole trader. The question is really - will this cause any issues for accounting /tax purposes. If the van has been 'purchased' by me?
he will manage all costs related to this.
 

Our long time trusted accountant is currently unwell in hospital so we cannot seek advice from her unfortunately. 

I hope this makes sense, thanks for any advice!

Replies (22)

Please login or register to join the discussion.

By Ruddles
19th Jan 2024 19:50

Perhaps not relevant to the question but why can’t he use the existing van?

Thanks (4)
Replying to Ruddles:
avatar
By David Ex
19th Jan 2024 20:02

Ruddles wrote:

Perhaps not relevant to the question but why can’t he use the existing van?

Indeed. And, even then, if the van is to be disposed of, why does the director not purchase it?

Thanks (1)
avatar
By BlueBottle
19th Jan 2024 19:54

Thank you,

Because the van is owned by his limited company. As the new work being carried out is not through the limited company then he cannot use the van for this purpose - we have been advised.

Thanks (0)
Replying to BlueBottle:
By Ruddles
19th Jan 2024 20:03

I don’t know who advised you/him but that sounds like utter nonsense.

There might be tax implications to consider but I’d like to know exactly why he can’t use the van.

Thanks (4)
Replying to Ruddles:
avatar
By BlueBottle
19th Jan 2024 20:13

Ok thanks, we will seek further advice.

My husband was advised this by the commercial vehicle company.

This has all just unfolded in the past 12 hours so I think we just need to take a step back and look at the options and making the change between Ltd company to Sole Trader.

Thanks (0)
Replying to BlueBottle:
By Ruddles
19th Jan 2024 20:30

The commercial vehicle company? Is the van leased (or on HP perhaps)? And not owned by your husband’s company, as you stated.

Thanks (1)
Replying to Ruddles:
avatar
By BlueBottle
19th Jan 2024 20:43

Yes, sorry that was misleading. It is on HP. So the van is not owned by the company.

Thanks (0)
Replying to BlueBottle:
Stepurhan
By stepurhan
20th Jan 2024 20:28

BlueBottle wrote:

Yes, sorry that was misleading. It is on HP. So the van is not owned by the company.

This is a contradictory statement. If your current accountant is too ill to advise, and does not have an alternate in place to fill in when they are indisposed, you should find another accountant.
Thanks (0)
avatar
By David Ex
19th Jan 2024 20:07

BlueBottle wrote:

Our long time trusted accountant is currently unwell in hospital so we cannot seek advice from her unfortunately. 

If your accountant is a sole trader, they should have an “alternate” to provide cover in situations like this.

Thanks (1)
Replying to David Ex:
avatar
By BlueBottle
19th Jan 2024 20:14

She does but this has just unfolded in the last 12 hours and she would usually be on hand to provide instant advice.

Thanks (0)
Replying to BlueBottle:
avatar
By David Ex
19th Jan 2024 20:16

BlueBottle wrote:

She does but this has just unfolded in the last 12 hours and she would usually be on hand to provide instant advice.

If she has an alternate then speak to the alternate!

Thanks (0)
Replying to David Ex:
avatar
By BlueBottle
19th Jan 2024 20:19

We’ve made contact but they hasn’t responded as yet.

Thanks (0)
avatar
By Matrix
19th Jan 2024 20:49

What is the difference between the commercial agreement that you are entering that permits him to use the van and the agreement which forbids the company to do so?

Thanks (0)
VAT
By Jason Croke
19th Jan 2024 23:12

Why does any business need "instant" advice on a Friday night?

There is nothing here that is urgent or time critical.

If van is on HP lease to Ltd and Director wants to use it personally, don't see issue. Why does husband have no credit rating but wife hss no problem? Makes no sense.

Thanks (5)
Replying to Jason Croke:
avatar
By taxdigital
20th Jan 2024 08:59

Jason Croke wrote:

Why does any business need "instant" advice on a Friday night?

Hahaha.. I think it must be AA&E (Accounting Accidents and Emergency)!

Thanks (3)
Replying to Jason Croke:
avatar
By BlueBottle
23rd Jan 2024 19:43

I was asking for advice to consider options over the weekend. I didn’t mean it needed to be instant but that is the service we had become accustomed to.

We both have excellent personal credit.
The commercial leasing company advised my husbands that his credit rating now (as a ‘brand new’ sole trader) would not be sufficient.

Thanks (0)
RLI
By lionofludesch
20th Jan 2024 09:26

Why doesn't your husband accept the work from the contractor and subcontract it to his company? He can then work for his company and use their van.

Meanwhile, I'd be interested to know on what grounds this tinpot subcontractor won't deal with companies.

Thanks (2)
Replying to lionofludesch:
Routemaster image
By tom123
20th Jan 2024 14:08

IR35 I would guess?
(not that I know anything in this area apart from what I read on here :) )

Thanks (0)
Replying to tom123:
RLI
By lionofludesch
20th Jan 2024 14:38

"Van" made me think CIS, Tom.

Thanks (1)
Replying to lionofludesch:
avatar
By BlueBottle
23rd Jan 2024 19:46

Yes CIS, you are correct. Thank you for actually providing me with some advice. It is clear from my question this is far from my area of expertise.
Thank you for not being patronising or condescending in your responses!

Thanks (1)
Ivor Windybottom
By Ivor Windybottom
20th Jan 2024 09:47

Presumably you are seeking to create a leasing business, BlueBottle, where you acquire a van on HP, etc. and rent it to your beautiful, but financially destitute husband.

Provided this is calculated correctly it may be possible to do this, but as others have said, whether this is wise (or tax-efficient) is something that warrants further advice.

Thanks (1)
Replying to Ivor Windybottom:
avatar
By BlueBottle
23rd Jan 2024 19:48

Thank you for the advice.
I’m not sure on the advice from the commercial leasing company but although my husband has excellent personal credit the company y advised due to his new sole trader status he wouldn’t be able to get credit for this particular agreement?

Thanks (0)