When is a van not a van

When is a van not a van

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I have a client who is converting a classic van (1968 Bedford Debonair) for mobile vending.

Am I right in concluding that this can be included in plant and machinery & not specified as a motor vehicle for capital allowance purposes? It's only use will be for attending events such as farmers markets.

Replies (12)

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By Tim Vane
10th Jan 2016 15:47

A van is always classed as plant and machinery, surely?

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By PracticePartner
11th Jan 2016 09:08

Not a van - yet?

The Bedford Debonair was a motorhome so is a Car for VED and BiK purposes. The conversion may make it a commercial vehicle but I'm not sure if the tax class would need to be changed, or how insurers and MoT testers will view it. Its a historic vehicle anyway so is VED exempt. Perhaps it is unlikely that HMRC would get too excited and if it is to be used for wholly business purposes all costs would be allowable.

I would be inclined to treat it (and its conversion costs) as P&M though.

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Replying to Youareatit:
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By Sparky745
11th Jan 2016 12:22

Not a Van - yet?

Many thanks PracticePartner.

I am not too concerned about the VED situation.  I wholeheartedly agree with you that HMRC would not get too excited and I will treat all of the costs as Plant & Machinery

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By Portia Nina Levin
11th Jan 2016 10:30

The effect of being a car, rather than a van, for direct tax purposes is that AIA will not be available on the capital costs of acquisition and conversion.

In order to be a van, it must be of a construction primarily suited to the conveyance of goods or burden of any description. See the Jones decision: http://www.bailii.org/uk/cases/UKFTT/TC/2012/TC01958.html

Unless the vehicle is being substantially reconstructed as part of the conversion, the nature of its construction is unlikely to be affected, so it is likely to still be considered to be a car for direct tax purposes.

Obviously, I take PracticePartner's word that the vehicle concerned was constructed as a motor home.

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By PracticePartner
11th Jan 2016 14:23

Pre-op it was a Van

In the beginning it was a Bedford CA, leaving the factory as either a van or chassis cab. Assuming there is a new style V5 present, if it is currently showing as a Motor Caravan or class M1SP it may be that like an ambulance, it remains a special purpose vehicle after conversion to mobile vending. Hearses also fit the requirement for this class, being vehicles "intended to perform a function which requires special body arrangements ...".

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By tom123
11th Jan 2016 16:43

Not sure I'd want food out of a hearse

Having said that, at last year's summer village fete, the local funeral director showed off his latest very shiny Mercedes hearse - with a competition to guess the number of balloons inside it.

 

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By CJaneH
23rd Nov 2022 14:56

Reading the replies above I am always disappointed that the letter of the law has priority over the spirit of the law, and that we accountants have to expend so much effort on this. I cannot see that after the conversion that the vehicle would be suitable for private use. The body of the vehicle will have been gutted out and no doubt cooking, refrigeration and washing facilities installed. I would imagine in the days of local tax inspectors that would be sufficient to classify it P&M.

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Replying to CJaneH:
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By Paul Crowley
23rd Nov 2022 15:13

The letter of the law is the law. Endex, sort of, until tested.
No real law at all until it goes to tribunal. Then anything can happen because the letter of the law is meaningless until interpreted

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Replying to CJaneH:
By SteveHa
23rd Nov 2022 15:43

To be honest, in the example quoted, treating as a car is likely to be most beneficial (List price when new and a percentage is likely to be less than van rates for BIK purposes).

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Replying to CJaneH:
A Putey FACA
By Arthur Putey
23rd Nov 2022 17:35

As this is a zombie thread I wonder if anything has changed in the legislation since 2016?

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Replying to Arthur Putey:
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By Tax Dragon
23rd Nov 2022 23:18

Don't know about that, but I did hear zombies had started drinking Coca-Cola.

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Replying to Tax Dragon:
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By Hugo Fair
24th Nov 2022 01:00

It's the real thing!

[Unlike most of this thread ... even with a detour to your suggested case].

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