Company Car Tax / BIK - VW Transporter Kombi
Discussion
I have my own limited company and I was thinking of buying a new VW Transporter Kombi van for both business and some private use. As its a Kombi van (basically means it has a second row of seating and windows opposite these seats) it looks like it might be in a grey area.
The DVLA class it as a van i.e. van RFL and has LGV & class N1 type approval on the V5C reg document. The VAT man allows the company to reclaim all the vat on the purchase (business cars are only 50% I believe). I have heard a rumour that since the 5th April 2015 the company car tax arm of the HMRC see it as a car and want to tax it as such (the costs go up massively on my income tax and fuel benefit and rules it out).
Are there any tax buffs on here that can offer me some advice please? I'm wanting to know if I purchase a new VW Transporter Kombi van whether it is going to be classed as a van or a car!
I'm also wondering that if I ever get stopped by Mr Plod for doing in excess of 50mph I can turn around and say that it is classed as a car and I am allowed to do 60mph!
Yours bewilderingly!
Ta
Ross
The DVLA class it as a van i.e. van RFL and has LGV & class N1 type approval on the V5C reg document. The VAT man allows the company to reclaim all the vat on the purchase (business cars are only 50% I believe). I have heard a rumour that since the 5th April 2015 the company car tax arm of the HMRC see it as a car and want to tax it as such (the costs go up massively on my income tax and fuel benefit and rules it out).
Are there any tax buffs on here that can offer me some advice please? I'm wanting to know if I purchase a new VW Transporter Kombi van whether it is going to be classed as a van or a car!
I'm also wondering that if I ever get stopped by Mr Plod for doing in excess of 50mph I can turn around and say that it is classed as a car and I am allowed to do 60mph!
Yours bewilderingly!
Ta
Ross
moochofun said:
I have my own limited company and I was thinking of buying a new VW Transporter Kombi van for both business and some private use. As its a Kombi van (basically means it has a second row of seating and windows opposite these seats) it looks like it might be in a grey area.
The DVLA class it as a van i.e. van RFL and has LGV & class N1 type approval on the V5C reg document. The VAT man allows the company to reclaim all the vat on the purchase (business cars are only 50% I believe). I have heard a rumour that since the 5th April 2015 the company car tax arm of the HMRC see it as a car and want to tax it as such (the costs go up massively on my income tax and fuel benefit and rules it out).
Are there any tax buffs on here that can offer me some advice please? I'm wanting to know if I purchase a new VW Transporter Kombi van whether it is going to be classed as a van or a car!
I'm also wondering that if I ever get stopped by Mr Plod for doing in excess of 50mph I can turn around and say that it is classed as a car and I am allowed to do 60mph!
Yours bewilderingly!
Ta
Ross
Regardless of what it's classed as, you don't want to be (admitting) using it for personal use unless to commute to a business site where it cannot be stored.The DVLA class it as a van i.e. van RFL and has LGV & class N1 type approval on the V5C reg document. The VAT man allows the company to reclaim all the vat on the purchase (business cars are only 50% I believe). I have heard a rumour that since the 5th April 2015 the company car tax arm of the HMRC see it as a car and want to tax it as such (the costs go up massively on my income tax and fuel benefit and rules it out).
Are there any tax buffs on here that can offer me some advice please? I'm wanting to know if I purchase a new VW Transporter Kombi van whether it is going to be classed as a van or a car!
I'm also wondering that if I ever get stopped by Mr Plod for doing in excess of 50mph I can turn around and say that it is classed as a car and I am allowed to do 60mph!
Yours bewilderingly!
Ta
Ross
To be honest, if it is classed as a light Goods Vehicle, then the personal use costs are minimal. It is only if it flips to a car would the BIK costs go through the roof.
My 5 seat pickup truck, which is genuinely always full of work kit, is classed as a LGV and I pay around £600 in BIK for it a year.
Also interested in this answer as I am looking at doing the same at the end of this year.
V.
My 5 seat pickup truck, which is genuinely always full of work kit, is classed as a LGV and I pay around £600 in BIK for it a year.
Also interested in this answer as I am looking at doing the same at the end of this year.
V.
As well as having much lower BIK costs - the definition of private use for a van is much less stringent than for a car.
You are allowed keep the van at home.
The journey from home to work is NOT classed as a personal journey
You are allowed "incidental" private journeys without the BIK being triggered
You are allowed keep the van at home.
The journey from home to work is NOT classed as a personal journey
You are allowed "incidental" private journeys without the BIK being triggered
Just google and found this.
http://www.volkswagen.co.uk/assets/common/pdf/ccd/...
No mention of anything odd with kombi vans in their document.
V.
http://www.volkswagen.co.uk/assets/common/pdf/ccd/...
No mention of anything odd with kombi vans in their document.
V.
The law as it stands does not define what a van is. It instead classifies motor vehicles as cars unless they fall into a number of exceptions. One of those is that a vehicle is a Goods Vehicle (colloquially includes a van).
A GV is broadly a vehicle that is primarily constructed for the purpose of carrying goods. So the purpose is the key defining point.
Having seats and windows behind the driver do not in themselves prohibit a vehicle from being a GV, but clearly they don't help. I'm not familiar with the VW, but you describe it as a transporter. Transporter of people I assume? In which case it would not fall into the exemption of being a GV.
If it is classified as a GV, I can't find anything in law requiring you to use the vehicle as a GV (happy to be corrected if I've missed something).
To benefit from no BIK charge, the vehicle can be used for home to work, and back, but must primarily be used for business purposes (home to work is not a business purpose). Some private use is also allowed, if the use is insignificant (undefined, but use its normal English meaning). HMRC does give some examples of what is considered insignificant.
Hope that helps.
A GV is broadly a vehicle that is primarily constructed for the purpose of carrying goods. So the purpose is the key defining point.
Having seats and windows behind the driver do not in themselves prohibit a vehicle from being a GV, but clearly they don't help. I'm not familiar with the VW, but you describe it as a transporter. Transporter of people I assume? In which case it would not fall into the exemption of being a GV.
If it is classified as a GV, I can't find anything in law requiring you to use the vehicle as a GV (happy to be corrected if I've missed something).
To benefit from no BIK charge, the vehicle can be used for home to work, and back, but must primarily be used for business purposes (home to work is not a business purpose). Some private use is also allowed, if the use is insignificant (undefined, but use its normal English meaning). HMRC does give some examples of what is considered insignificant.
Hope that helps.
Alpinestars said:
Having seats and windows behind the driver do not in themselves prohibit a vehicle from being a GV, but clearly they don't help. I'm not familiar with the VW, but you describe it as a transporter. Transporter of people I assume? In which case it would not fall into the exemption of being a GV.
You know what they say about assumptions 
A Transporter is a model name, bit like a Transit. It's a van, primarily, the Kombi is the van version with seats fitted, and therefore highly likely it's a goods vehicle.
They also used to do a so-called 'Window Van', which had the option of windows in some or all of the side and rear panels, and also the option of seats. A utilitarian version of a Caravelle if you will. Not sure if they still do them, but again, they were classified as a goods vehicle.
As I understand it, the vehicle needs a payload of 1000kgs to qualify as a commercial vehicle with rear seats, in the same way that a double cab pickup does. From memory on the older model Transporters this ruled out the T28 Kombi, but the T30 SWB and T32 LWB were okay.
Your local dealer should know the answer to this, give them a buzz and see what they say!
Cheers, Richard.
Your local dealer should know the answer to this, give them a buzz and see what they say!
Cheers, Richard.
rfoster said:
As I understand it, the vehicle needs a payload of 1000kgs to qualify as a commercial vehicle with rear seats, in the same way that a double cab pickup does. From memory on the older model Transporters this ruled out the T28 Kombi, but the T30 SWB and T32 LWB were okay.
Your local dealer should know the answer to this, give them a buzz and see what they say!
Cheers, Richard.
To be a van a vehicle needs to be a goods vehicle and have a design weight not exceeding 3,500 kg. A goods vehicle is defined as a vehicle of a construction primarily suited for the conveyance of goods... No mention of a payload of 1,000kgs. Your local dealer should know the answer to this, give them a buzz and see what they say!
Cheers, Richard.
And to correct my earlier post, I've just read S115(1) ITEPA 2003 (yes I know I need to get out more), and that does define a van (as defined above).
Ah you're right - that 100kgs rule only applies to double cab pickups, and not to commercial vehicles.
Found this on the accounting web site:
"The term commercial vehicles used by the manufacturer is meaningless.
It's not important whether the vehicle is a van. What's important, is that it's not a car.
For VAT purposes it will be a car if:
•it is of a kind normally used on public roads, and
•which has three or more wheels, and either: ◦is constructed or adapted for carrying passengers, or
◦has roofed and windowed accommodation behind the driver,
excluding:
•vehicles capable of accommodating only one person,
•vehicles with a gross weight of at least three tonnes,
•vehicles with a payload of at least one tonne,
•minibuses (for 12 or more people),
•caravans, ambulances, prison vans and other special purpose vehicles.
For P11D/capital allowances purposes it will be a car if:
It is a mechanically propelled road vehicle, which is not:
•a goods vehicle (of a construction primarily suited to the conveyance of goods or burden of any description),
•a motorcycle (fewer than four wheels and an unladen weight of no more than 425Kg),
•an invalid carriage (specifically designed for disabled use and an unladen weight of no more than 254Kg), or
•a vehicle of a type not commonly used as a private vehicle and unsuitable for such use.
People (at least living ones) aren't goods or a burden of any description, so anything with seats in the back (other than a double cap pick up type vehicle with a one-tonne+ payload) is likely to be regarded as a car for direct tax purposes.
Anything with seats in the back and/or roofed and windowed accommodation behind the driver (other than a double cab pickup with a one-tonne+ payload) is likely to also be a car for VAT purposes."
And more details on the HMRC website here: http://www.hmrc.gov.uk/manuals/eimanual/eim23110.h...
BUT - still not clear on the kombis! I have however supplied many kombi style vehicles over the years on contract hire to construction companies, and in these instances they have been treated as commercial vehicles.
Found this on the accounting web site:
"The term commercial vehicles used by the manufacturer is meaningless.
It's not important whether the vehicle is a van. What's important, is that it's not a car.
For VAT purposes it will be a car if:
•it is of a kind normally used on public roads, and
•which has three or more wheels, and either: ◦is constructed or adapted for carrying passengers, or
◦has roofed and windowed accommodation behind the driver,
excluding:
•vehicles capable of accommodating only one person,
•vehicles with a gross weight of at least three tonnes,
•vehicles with a payload of at least one tonne,
•minibuses (for 12 or more people),
•caravans, ambulances, prison vans and other special purpose vehicles.
For P11D/capital allowances purposes it will be a car if:
It is a mechanically propelled road vehicle, which is not:
•a goods vehicle (of a construction primarily suited to the conveyance of goods or burden of any description),
•a motorcycle (fewer than four wheels and an unladen weight of no more than 425Kg),
•an invalid carriage (specifically designed for disabled use and an unladen weight of no more than 254Kg), or
•a vehicle of a type not commonly used as a private vehicle and unsuitable for such use.
People (at least living ones) aren't goods or a burden of any description, so anything with seats in the back (other than a double cap pick up type vehicle with a one-tonne+ payload) is likely to be regarded as a car for direct tax purposes.
Anything with seats in the back and/or roofed and windowed accommodation behind the driver (other than a double cab pickup with a one-tonne+ payload) is likely to also be a car for VAT purposes."
And more details on the HMRC website here: http://www.hmrc.gov.uk/manuals/eimanual/eim23110.h...
BUT - still not clear on the kombis! I have however supplied many kombi style vehicles over the years on contract hire to construction companies, and in these instances they have been treated as commercial vehicles.
rfoster said:
BUT - still not clear on the kombis! I have however supplied many kombi style vehicles over the years on contract hire to construction companies, and in these instances they have been treated as commercial vehicles.
I'm no expert on Combis as shown by my earlier post, but what a buyer or seller classify the thing as is not definitive. It all depends on the what the vehicle was primarily constructed for (as set out in Case Law eg Jones v HMRC). I'm not sure this makes it any clearer vis a vis the Combi.
This subject looks like its about to get interesting.
http://www.whatvan.co.uk/analysis-and-comment/2015...
http://www.whatvan.co.uk/analysis-and-comment/2015...
Oh, Bugger.
I have just started looking at Crew Cab vans as I need more space for kit and crew!
Looks like I am going to have to wait and see what the outcome of this all is, the pickup has been great, but I am running out of space and cant move big tv screens in it as it isnt long enough in the pickup bit.
Hate the tax man dithering, flag in the ground time, then we all know where we stand.
V.
I have just started looking at Crew Cab vans as I need more space for kit and crew!
Looks like I am going to have to wait and see what the outcome of this all is, the pickup has been great, but I am running out of space and cant move big tv screens in it as it isnt long enough in the pickup bit.
Hate the tax man dithering, flag in the ground time, then we all know where we stand.
V.
Just giving this some further thought. The greens will or could have a field day with it...... What HMRC are suggesting is that:- let's suppose you need 4 sparkles on site and a pile of gear...... You have a couple of sensible options.....
1 man takes the hit of his van is a car, and gulp, pays a hefty PAYE charge... He can then carry 3 other guys to site, and do the "job"......
Alternatively.
The employer has to buy 2 vans to take 2 men in each van to site to do the required work..... Note additional van, running costs etc...
2 additional guys get the bus!!!!!
I understand that HMRC are really trying to close the loop on the leisure weekend user running his van through the business. But what then happens to roadside welfare vans, that seat 6???? That are an aftermarket conversion.....
If this goes through.... Sales of combi vans in general must plummet.... Wonder what VW and Merc are planning to do if that's the case...
1 man takes the hit of his van is a car, and gulp, pays a hefty PAYE charge... He can then carry 3 other guys to site, and do the "job"......
Alternatively.
The employer has to buy 2 vans to take 2 men in each van to site to do the required work..... Note additional van, running costs etc...
2 additional guys get the bus!!!!!
I understand that HMRC are really trying to close the loop on the leisure weekend user running his van through the business. But what then happens to roadside welfare vans, that seat 6???? That are an aftermarket conversion.....
If this goes through.... Sales of combi vans in general must plummet.... Wonder what VW and Merc are planning to do if that's the case...
This is all getting a bit messy.
Anyone been following this?
http://www.businesscarmanager.co.uk/double-cab-pic...
Anyone been following this?
http://www.businesscarmanager.co.uk/double-cab-pic...
I've seen bits online recently but no definitive news. I'm not surprised they are clamping down, my crew van is so fancy and looks the same as a £40k + people carrier version. Compared to vans of old it's not a chore to drive them. We took it to the south of France on holiday rather than our car as it's more practical and as comfy. I do however use it every day for moving things for the business that I couldn't move with a car, so I do need the room.
jke11y said:
I've seen bits online recently but no definitive news. I'm not surprised they are clamping down, my crew van is so fancy and looks the same as a £40k + people carrier version. Compared to vans of old it's not a chore to drive them. We took it to the south of France on holiday rather than our car as it's more practical and as comfy. I do however use it every day for moving things for the business that I couldn't move with a car, so I do need the room.
Went through this 18 months ago with a Sportline Kombi, accountants confirmed car status with HMRC and it had to go. Wouldn't be surprised if they changed their minds about double cabs as well, HMRC are truly special!Gassing Station | Business | Top of Page | What's New | My Stuff