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General: Pickups and Tax

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  1.  
  1.  
    Not exactly environmentally friendly but pickups....

    Recently set up my own limited company where I'm essentially doing small scale insurance remedial repair works.

    Currently paying myself as a director 'mileage' on my private vehicle. Should be a profitable first year an done of the things that I may be looking into is either getting a small van or possibly a pickup.

    Now I know they're not the greenest of vehicles 'BUT' I was thinking the tax benefit for me in getting a pickup could be offset to install solar panels on my house for instance....

    Does anyone have any experience in pickups? Mileage is ~12,000 miles a year so something with good mpg would be useful. I won't need much space but the option to have a hardtop would be good to deliver small sheet materials, tiles and transport of general waste would be useful.

    Also what sort of age vehicle or models are best to look out for? Or is this one of the reasons to perhaps buy brand new to offset corporation taxes etc etc?

    Thoughts appreciated
    • CommentAuthorrevor
    • CommentTimeJan 9th 2020
     
    Depends if you are VAT registered then you can get the VAT back on the pickup. Then you can run it as a business vehicle and claim the fuel VAT and servicing etc quarterly. If you are not VAT registered you could get any vehicle and claim running expenses against your business and wait until the annual tax return before you get the benefit. If you are turning over £85k or more you will have to sign up to making TAX digital in which you will make a tax return each quarter. Best consult an accountant to advise best route for you. Which way to go will at end of day be dictated by your expected turnover I would guess.

    As far as pickups go I have an Isuzu Rodeo bought new in 2005 as private vehicle (to tow a caravan and DIY). I am now using it as business vehicle in my smallholding veg growing business started when retired from working for someone else. It would not support me changing for a new one. Given my turnover my accountant would be asking serious questions and HRMC also I reckon. It still runs well and given me little grief (famous last words) and I would go for another one.

    If you are worried about your green credentials you could go for one of these.

    https://www.youtube.com/watch?v=J-falgJE1xg

    At end of day its down to how profitable you will be and what the business will support.
  3.  
    Currently vat registered using flat rate system as first year. Turnover will be approximately £300k so no issue there

    Just looking until vehicle options. An electric vehicle would be good but no charging facilities at my house...
  4.  
    Posted By: VictorianecoCurrently vat registered using flat rate system as first year. Turnover will be approximately £300k so no issue there


    Be really careful and get a decent accountant onboard just now - for the type of work that comes to mind when you say small scale remedial works I struggle to see how you get to 300k turnover in the first year, remember the adage "turnover is vanity, profit is sanity". I would try and minimise the turnover figure for a startup which is why you need a decent accountant who knows the field you are in. Van far more useful than a pickup if you are moving any sheet materials - don't buy a small van without double checking actual load bay dimensions though as some estates are have more usable space! However the first thing to do is get a decent accountant to advise what the business can support, untill then stick with your directors mileage on your own car and use a trailer on it if you require extra space. All the best in the new business!
  5.  
    Hi Willie

    My accountant has suggested the asset route but at he's not a vehicle orientated person he suggested looking into a pickup as one option.

    I don't physically need the idea of a van or even a pickup but unfortunately the tax savings are worthwhile.

    Hence my question on any experience in models etc?
  6.  
    Ditch the accountant! If the company is not yet in profit, don't spend the money on a new vehicle if the current personal vehicle is doing the job. Claiming mileage on it is likely to still be a reasonably tax efficient option.

    Once the company can afford it then get yourself an EV and enjoy far better tax breaks. Your accountant should have advised you that EVs are to be zero rated BIK for this financial year, then 1% and 2% for following years. Significant savings likely compared to the pickup option.
  7.  
    The company is in profit. The accountant merely suggested to reduce tax then vehicles can be a way of doing so.

    I also have to make child maintenance payments based on my income to my ex partner, without getting into it she had screwed me over recently so I have no issue paying my fair share but having certain expenses also saves me further.

    An EV is out of the question as I said - no charging facilities...

    Wouldn't this also then have company car benefits and taxes associated. At least a pickup is then a commercial vehicle and can claim other costs outright
    • CommentAuthorSimon Still
    • CommentTimeJan 17th 2020 edited
     
    Why a pickup and not a small van - more practical in nearly every way (unless you genuinely need an off road vehicle) than a pickup, will be better to drive, easier to park and more fuel efficient.
  9.  
    Because it would ultimately replace our own vehicle, so 5 seats would be essential.

    As I said, in my head I'd like to 'offset' by paying towards PV on our house for instance...
    • CommentAuthorphiledge
    • CommentTimeJan 17th 2020
     
    Be careful if the pickup is the only vehicle you have especially a 5 seater as its quite obvious that its not solely for business use and youll get hit with a benefit in kind tax bill.
  11.  
    Frankly buying an oversized 4x4 pickup for the tax benefits is about the least green thing you can do. They're terrible vehicles to be around for other road users.

    If you want to scam business tax for personal use buy a regular size van (ideally with two sliding rear doors), claim the tax benefits and then so what someone I know has done -
    - get camper van windows fitted in drivers side sliding door
    - get a twin seat seat fitted behind the drivers seat with seat belts.
    - build a wooden bulkhead around the rear seat and behind the passenger seat

    If you get the standard bench front seat in the van, you can seat 5 people when you need to but you've still got a proper usable works van that will take full size 8x4 sheets down the passenger side (and which has the "dirty" cargo area separated from the passenger area.

    Better than a pickup in every way - more passenger space, more load space, more secure.

    My mate's a pro cabinet maker so did the fit out himself and it's really nicely done. I *think* he has built it so all the bulkhead and seats are reasonably easy to remove so that if he ever needs the full van capacity he can take them out. That also goes for any inspection that's needed (nothing wrong with having windows in a works van).
  12.  
    >>> the least green thing you can do
    +1

    Simon described something like a 'Kombi' or double cab van, comes with 6 seats, back seating is flexible, a neighbour has one for dropping kids at school on the way out to her business. The mpg is fairly rubbish for a family car. Ford are just launching a plug-in hybrid Transit version with low personal tax but will be ££££ to buy. Another neighbour's employer uses van-converted Mitsu Outlander PHEVs as their works vans.

    EVs are still an awful lot of £ per unit of CO2 saved, there's more effective ways to spend your £.

    Don't let perverse tax incentives 'drive' you to do bad things! Better to spend a fraction of the money on: 1 an old diesel van that's right for work 2 an old diesel car that's right for home, 3 a Cycle To Work Scheme e-bike for everyone in your family who you claim to employ, and put all the rest of the money you saved into doing something green to offset 1 and 2 (invest in windfarm companies, or check the tax advantages of charitable giving or planting trees)
    •  
      CommentAuthordjh
    • CommentTimeJan 18th 2020 edited
     
    Posted By: Simon Still- get camper van windows fitted in drivers side sliding door

    I expect I'm behind the times, but I thought windows behind the driver meant a vehicle wasn't a 'van' for tax purposes?

    Posted By: WillInAberdeen1 an old diesel van that's right for work 2 an old diesel car that's right for home

    Why do they have to be diesel? Especially since I think VE lives in London. Why not petrol, or a petrol hybrid? Or even a Leaf for the home car?

    Full disclosure: Note that I don't pretend to be especially green in this area. I've never owned a diesel; they've always been petrol. I expect the next car I buy will be an EV, but I've never bought new and used electric hatchbacks/estates with good range are thin on the ground AFAICT.
  14.  
    Oh, I thought VE is in South Wales? Sorry if my mistake. If in London then the exemptions from the various charge zones distort the choices. Old diesels tend to emit less CO2 than old petrols. Don't think there are any old petrol hybrid vans yet, there are certainly cars, but the early hybrids didn't look much better CO2 and were more money.
  15.  
    I'm based in South Wales.

    Obviously nobody wishes to pay tax so looking for the greenest way to do things but also save cash.

    A new EV looks good, but in general you lose on depreciation so it's settings and roundabouts

    Some kind of van work rear seats would be good. I bet rarely need to load any materials but it could be handy.

    What vans would you be looking at? Again electric vans are not practical as no charging facilities. Petrol preferred but I'd like something comfortable to drive, you know, leather seats etc.
  16.  
    VE, take a look at the Ford Tourneo Connect - your requirements for 5 seats effectively means that you are not going to get any of the tax advantages of a van and you will be hit with benefit in kind taxes. You can get the seating capacity you need with decent capacity for shifting cargo when needed as well for the size of vehicle and not have to pay a fortune in BIK taxes especially if you go for the base 1L petrol model.
    • CommentAuthorphiledge
    • CommentTimeJan 19th 2020
     
    Posted By: Victorianeco

    Obviously nobody wishes to pay tax so looking for the greenest way to do things but also save cash.



    Given that all new vehicles come with a massive manufacturing emmissions footprint, theres a fair chance that using your existing car and keeping it in a well maintained state would be the greenest option. Its likely to be your cheapest option as continuing to pay yourself 45p/mile more than covers running costs and gives the company a ligitimate expense. If you need more expediture for the company, it can pay into a pension for you up to the level of your remuneration which is likely to be at least £8600. Unless your new truck is exclusively for business use, which youve said it isnt, there isnt likely to be masses of tax to be saved with a new truck
  18.  
    Posted By: djhI expect I'm behind the times, but I thought windows behind the driver meant a vehicle wasn't a 'van' for tax purposes?


    I'm guessing that once you've bought it what you do to it afterwards is invisible to the taxman (though presumably you still need to get it insured properly). Morally I don't see an after purchase conversion as being any different to the pickup purchase and it's one less horribly inappropriate vehicle on the road (you might only have it for a couple of years but it's going to be on the road long term).


    Posted By: WillInAberdeenIf in London then the exemptions from the various charge zones distort the choices. Old diesels tend to emit less CO2 than old petrols

    Surely if this is a 'green' forum should be concerned about air quality and not just CO2. There's a reason for charges on old diesels in London and if you're in the country those dirty emissions don't just disappear.
    Bristol is about to ban ALL diesels from city centre - expect other places to follow suit. Even new ones have been shown to be poor.

    Posted By: willie.macleodtake a look at the Ford Tourneo Connect

    This. Get the right vehicle for you not just the tax scam. Van based cars are great - enormously practical with most of the creature comforts of a modern car. We've got a VW Caddy Life - the benefit over Ford/Citroen/Purgeot/Fiat versions is a completely flat load area - seats roll forward not flat so you can fit a rubber load bay floor and sweep out the back when you need to.
  19.  
    Simon, are you getting reasonable mpg from that? I'd understood that using a van as a family car, burns rather more fuel, but you never know whether to believe the figures... what is your experience?

    Focus 1.5 ecoblue 120:. 80.7mpg
    Tourneo 1.5 ecoblue 120:. 62.8 mpg
    • CommentAuthorSimon Still
    • CommentTimeJan 20th 2020 edited
     
    Posted By: WillInAberdeenSimon, are you getting reasonable mpg from that? I'd understood that using a van as a family car, burns rather more fuel, but you never know whether to believe the figures... what is your experience?

    Focus 1.5 ecoblue 120:. 80.7mpg
    Tourneo 1.5 ecoblue 120:. 62.8 mpg


    So. We've got the 1.4TSi petrol with auto gearbox. The combined fuel economy published for that is 49mpg. Golf estate with the same engine is published as about 54mpg. Ours reports average economy of 40mpg - we're either driving in heavy traffic to get out of London or sitting cruising at legal motorway speeds.

    Firstly, they're not in any way comparable vehicles - the Maxi life is a 30cm longer, 7 seats instead of 5 and still has a boot of 530 litres (against the Golf 605). With the seats down the golf is 1620l boot - the caddy maxi is twice that - 3200L (maybe even more if you take the seats out rather than folded). Go up to the Passat and you still only get 1800L.

    Secondly, better fuel economy doesn't save you much money. 10k miles a year the difference in running costs between 40mpg and 50mpg is only £300 a year.

    The aerodynamics mean you're always going to have worse fuel economy that a traditional car but probably no worse than some stupid jumped up SUV and vastly more practical than either. Van based cars are the true "sport utility vehicle" - our bikes go in standing up with just the front wheel removed.
  21.  
    What's your preference for a van to convert then?

    Mercedes Vito look decent compared to the costs of say a 'Transporter'
    • CommentAuthorSimon Still
    • CommentTimeJan 20th 2020 edited
     
    View from people I know seems to be

    VW Transporter - great vans but massive 'badge tax' and latest generation nowhere near as well built as they were in the past. Still very good vans to drive with quality VW switchgear and engines.

    Ford Transit - drive as well as a VW but I think someone told me about a third cheaper new (get discounted heavily whereas you get nothing on a VW). Interior not as good though.

    Mercedes Vito - used to be rear wheel drive (so spun wheels when unloaded or, say, used a leisure van. Relatively small inside but Mercedes dashboard and cab and fancy leather options from the factory. Older ones were meant to rust. No idea about current model - don't know anyone who's had one.

    Renault Traffic/Vauxhall equivalent. cheaper than the others. Wider internally so better for camper conversions (and you can get a mountain bike across it in a 'garage' at the back). Used to be the only one that would take an 8x4 sheet fully upright? (not sure on that last bit but definitely something about sheet capacity)

    Those are all big vans though - VW Caddy (long wheelbase) much more fuel efficient and still a big load capacity.
  23.  
    Vw caddys available with extra seats etc or too small?
  24.  
    https://www.volkswagen-vans.co.uk/en/new-vehicles/caddy-life.html

    https://www.volkswagen-vans.co.uk/en/new-vehicles/caddy-kombi.html
    • CommentAuthorCWatters
    • CommentTimeJan 26th 2020
     
  26.  
    Revisiting this and I'm thinking a transit connect looks a good option

    Are there any particular specs I should be looking at? As I'd like a bit of luxury in my life so nothing too basic
    • CommentAuthorwookey
    • CommentTime3 days ago edited
     
    <blockquote><cite>Posted By: Victorianeco</cite>A new EV looks good, but in general you lose on depreciation</blockquote>

    At the moment EV depreciation is very low indeed because there aren't enough to go around. May be different for vans, but driving a model3 off the lot loses you more like 3% than the traditional 20%. Older EVs like used leafs have been worth slightly more after 2 years usage than they were when bought. This may not last too much longer but it's not a normal market and probably won't be until there are enough s/h vehicles to satisfy demand.

    You said you have no charging, but can't you install a charger (or get one installed)? Makes your motoring very cheap indeed per mile.

    If you want seats in the back, buy a combi van (as has been suggested) such as a Renault Kangoo, Citroen Berlingo, Peugeot Partner. (Kangoos available as electric and really quite good value, unlike Masters where the EV version has a huge premium). Certainly in a Berlingo the seats fold up so you can still get sheet materials in. I assume you can do the same in a Kangoo. Really versatile vehicles.

    There is a Kangoo Crew cab version (English for 'Combi'), available as EV or Diesel.

    The old (1990s, NiMH!) electric Berlingo is no more. There will almost certainly be a new lithium one out in the next year or so - there are a _lot_ of electric vans coming in the next year or two, some of which should have decent range, and Ford will be putting out a hybrid transit too.

    I think it's daft to be looking at a new vehicle which is not electric or at least hybrid at this point, especially if you are remotely green-minded. If the specs or prices don't quite work for you then just wait a few months - things are changing fast in this area. New cars are mostly 200+ miles now, vans will have to follow suit, but they have a big market of short-range daily-delivery fleets to satisfy first. At the moment the only way to get a long-range van is get an eNV200 and send it to Muxsan in the Netherlands who will double the battery capacity so it does 200+ miles, which is kind of ridiculous.

    And yes UK vans don't have rear windows, because otherwise you'd have to pay VAT on them. French ones do because the rules are different. But you can put in rear windows after you've bought it and it's still a van (I did this to both mine). http://wookware.org/pics/van/img003.jpeg.html
  28.  
    Be careful

    https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim23115

    "In considering [taxable benefit] we need to look at the construction of the vehicle at the particular time in question. This may not be the same as its original manufactured construction. If modifications are sufficiently permanent and substantial in scale, they may alter its [taxation]."

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