farmer purchasing 4x4 - The Book-keepers Forum (UK)

lor · Guru

farmer purchasing 4x4

Wella · Expert

Hi Lor

If the 4x4 is a car (Landcruiser, Range Rover, Discovery etc) then I don't think you can reclaim the VAT.

If it is a single cab pick up truck like a Hilux (but not a crew cab or double cab, that's classed as a car) or a van with no rear seats, then I believe it is claimable.

If the vehicle is leased then depending on if its 100% for business with no private use then VAT can be claimed.

A quick link to look at

http://www.hmrc.gov.uk/vat/managing/reclaiming/motoring.htm

Bill

adi2402 · Senior Member

hi, be careful with double cabs, some can be classed as cars, some as agri vehicles. A good indicator can be the pickup payload capicity, with >1 ton payload indicating a potential agri vehicle. Had a landrover defender double cab the other day that was classed as an agri vehicle with corrasponding VAT and AIA allowances claimed.

If your accountant has a decent agri dept I would email a copy of the details to them and get their professional opinion, that way your covering yourself.

lor · Guru

thanks, I will email the accountant to see what he says and let you all know!

lor · Guru

This is what the accountant has said:

As it is not a commercial vehicle he will struggle to prove that it is purely for business use and that there is no private use whatsoever. Due to this no VAT will be reclaimable.

Also as it is a limited company there is potentially company car tax. It is most likely, from a tax perspective, that he will be better off leaving the vehicle outside of the business and claiming mileage expenses.

If however he can prove that there is indeed no private use at all (i.e. not by any employees, not to and from work) then VAT may be reclaimable. However saying this happens and being able to prove it are two different things.

As a note for the future I would advise that he looks at vehicles classed as commercial vehicles (pick-ups (including most double cabs), vans, combi-vans, etc). VAT would be reclaimable and no company car tax would likely to be payable.

adi2402 · Senior Member

Found this quote, I think thisis still applicable (would need to check)

"HMRC accept that a double cab pickup with a payload of 1,000Kg or more is a van. However if the payload area is covered with a hardtop (making the pickup more akin to an estate car) it will restrict the payload capacity. Hard tops have a deemed weight of 45Kg.

If the vehicle originally had a payload of say 1,015Kgs, after fitting the hard top this will drop the payload weight to 970Kgs turning the pickup into a car at a stroke with all the attendant benefit in kind issues. "

On what basis did the accountant dismiss this as an agri vehicle, I assume he has review the purchase documents. Just curious.

-- Edited by adi2402 on Wednesday 16th of June 2010 12:30:28 PM

Wella · Expert

Just another useful HMRC link regarding VAT, cars and vans

http://www.hmrc.gov.uk/vat/sectors/motors/what-is-car.htm#3

adi2402 · Senior Member

cheers wella, that backs up the 1t payload point I was making, knew I had seen it someplace!

Wella · Expert

adi2402 wrote:
......... knew I had seen it someplace!

A problem I have all the time??

An interesting point about adding an hard top cover to a pick up, hadn't considered that?
Suppose it depends on the GVW of the pick up, you could strip all non essentials out and do away with the spare wheel/ tool kit etc and then try and convince HMRC that the load capacity was still 1tonne (bet they wouldn't be overly accommodating!)

Bill

adi2402 · Senior Member

Yeah a tricky area and alot on the line at times with VAT and AIA's etc. TBH i would have thought that the client would have done the reseach before hand (or asked the question) and bought the appropriate vehicle (or he might not be that bothered, or already had a vehicle in mind).

Shamus · Forum Moderator & Expert

Hi Lorraine,

rather than give you paraphrased excerts check out these links from accounting web :

http://www.accountingweb.co.uk/anyanswers/luxury-4x4-commerical-vehicle

http://www.accountingweb.co.uk/item/158475

http://www.accountingweb.co.uk/item/171246

http://www.accountingweb.co.uk/item/90566

http://www.accountingweb.co.uk/item/119749

http://www.accountingweb.co.uk/anyanswers/company-car-tax-2

Have fun reading!

Amanda · Expert

How did the job interview go Shaun in scotland?

Shamus · Forum Moderator & Expert

Hi Amanda,

Cheers for asking.

seemed to go ok thanks but won't know if I've got it for another couple of days.

They've still got four more people to see but as they were discussing what time I could leave on Fridays to travel home, availability over Christmas, showed me around the place etc. whilst it's not a done deal I'm feeling quite positive.

I started off to Edinburgh at 1 a.m. last night so by the time of the interview I was absolutely wired on Cappuccino's and Red Bulls.

Just waiting now for the complete exhaustion to set in

Rhianrach · Expert

Shamus wrote:

Hi Amanda,

Cheers for asking.

seemed to go ok thanks but won't know if I've got it for another couple of days.

They've still got four more people to see but as they were discussing what time I could leave on Fridays to travel home, availability over Christmas, showed me around the place etc. whilst it's not a done deal I'm feeling quite positive.

I started off to Edinburgh at 1 a.m. last night so by the time of the interview I was absolutely wired on Cappuccino's and Red Bulls.

Just waiting now for the complete exhaustion to set in

You must be shattered, Good luck by the way, does sound promising.

lor · Guru

Update:

The 4x4 has been put on the balance sheet and the expenses and vat have been claimed.

It was along the lines that if the client can prove that it is 100% business and expect questions from HMRC, and they are happy with this then put through the accounts. So that is what I have done.

Thank you everyone for your assistance. My job is complete on the farmer accounts front!