I wonder if anyone can help here, in April 17 a company that I work for bought a van on HP. We claimed the vat and it has all been put through, but no HP payments were ever taken. I know it's a bit naughty but the director didn't get in touch with the HP company as money was tight for quite a few months. However, in Oct 18 the other director realised that the payments had been coming out of his personal bank account all of this time. The company is still not financially secure and able to pay back this money to the director. The HP agreement was for 47 months, so still quite a lot to pay on it, the company have been paying for it since Oct 18, but now they are thinking that the director who has paid most of the payments so far, may as well buy it from the company. The year end is 31.03, so in the 2018 accounts (as they were done in Nov 18 so by then we knew that the director had paid the HP privately) are showing it as a directors loan. My question is, what is the best way to sell in to him and show it costing the company as little as possible? The company still owe him the previous 16 months worth of payments, if he buys the van at the guide price that it is currently worth £10680, the company would still owe him the loan (HP payments) wouldn't it? Really sorry if it's a simple question, I can't get my head around it and I do hope that it makes sense.
In a rush, but if there is still outstanding HP are the Company allowed to sell the van? I maybe wrong but I always thought that the lender is still the legal owner until the agreement is settled, might be worth speaking to the lenders.
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Hi Doug,
Thanks for your reply. The company have got in touch with the lender and got a settlement figure-sorry I probably should have said originally.
Many thanks
Hi Nicola, a few things to consider if I have read this right (which I am not sure I have)
Yes the company will still owe the Director for the DLA
The sale would take place at market value but seeing as the Company are VAT registered they will have to charge VAT and presumably the Director will not be able to claim this back
I assume that AIA was claimed on the full purchase price so this would then bring about a disposal and CT on the gain
The company no longer has a van
Not sure who if anyone would actually gain out of this
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
