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)
Please login or register to join the discussion.
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.
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.
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 ...".
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.
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.
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
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).
As this is a zombie thread I wonder if anything has changed in the legislation since 2016?
It's the real thing!
[Unlike most of this thread ... even with a detour to your suggested case].