Business vehicle

First post, so bear with me ..

I currently own my own vehicle (car-van, diesel, commercial) but have also just recently set myself up in a business. I want to update my vehicle to a newer diesel commercial but am not sure which way to go about it.
I am VAT registered so presumably I can claim the VAT back on any commercial I purchase. Can I claim VAT on diesel also ? Should I sell my current van to the business before trading it in against the newer one ? What are the BIK implications ? Or should I just keep my vehicle out of the business altogether, & just claim diesel expenses ? (sole-trader btw)

Good advice would be appreciated.

Thanks.

You can claim the Vat back on diesel, not on petrol. You can also claim the VAT back on a purchase. Also, there are no BIK implications for you as you operate as a sole trader.

Is it possible for a LTD Co. Director to buy a new vehicle without getting whacked by BIK?? Please advise..

don't think so. There is always going to be a bik issue.
If you keep proper mileage records and can convince the rev that every mile was business related them maybe you could get around the bik issue.

But if you don't the revenue will always put a minimum of 5000 miles as personal therefore you get caught for bik.

A comercial jeep is the way to go I think bik is minimal.

How about buying a commercial vehicle through the company specifically for business purposes and buy a vintage car through the company for personal purposes and the BIK on the vintage car will be minimal.

ivorystraws said:

How about buying a commercial vehicle through the company specifically for business purposes and buy a vintage car through the company for personal purposes and the BIK on the vintage car will be minimal.

Click to expand...

Wouldn't it be great to have all this money gathering dust in a bank.

Ivory - I like the idea of a classic car. MGB can be bought for about 10k, and in theory BIK should be minimal because when the car was new in 1973 (or earlier) it cost 1k (or whatever).

Or a porsche 911 around 1970 for about 20k today and very little new in 1970.

This means you pay BIK on very little, the new price back in the 70's.
But are you sure this is possible ?
My understanding was this loophole was closed ?

For LTD co. a commercial vehicle seems to be the way to go.
Even if you contribut nothing to the upkeep or running of the commercial vehicle then you still only pay a small BIK payment. I believe its 5% of the value of the car is added to your salary.

So a commercial for 20K means you earn through BIK an extra - 20K X 5% = 1000 over 12 mnths.

This is my understanding.

A question though does this apply to 2nd hand commercials ?

In the past there was no BIK on company vans.

Then, in 2004, it was introduced at a rate of 5pc, as opposed to the higher rate of 30pc that applies to company cars. However, it may be that you are exempt from BIK, if you satisfy the three conditions outlined below.

As a rule, where an employee has the private use of a van, the benefit is valued as the cash equivalent of 5pc of the new purchase price, inclusive of VAT.

So this means that if the van cost say €40,000 and you earn €30,000, then it will cost you around €960 in additional income tax and PRSI next year.

To qualify for the exemption from Benefit in Kind on the private use of a company van, you must satisfy all three of the following conditions:

(1) The van must be used essentially for the purpose of your work, and you couldn't carry out your duties without it.

(2) Secondly, your employer requires you to bring the van home each night.

(3) Thirdly, you spend most of your working time away from the office.

If all three apply to you, then you will not have to pay any BIK on the use of the van.