I'm looking at getting a company car. I'm reasonably well versed on how it works and the very good reasons why it generally doesn't make financial sense, however...
As I understand it, I can take a company car. The business buys and maintains it, with the associated reclaim of vat and reduction in CT, but I pay BIK, calculated on book value, emissions etc, and can only claim a reduced value for mileage (as the wear and tear is already incurred my the company). Generally speaking this has no advantage over running a car personally and then claiming the mileage.
To have a company car, I do not need to demonstrate that I use it for work, and the BIK assumes that all use is personal (i.e. There is no pro rata of business vs private use).
Finally, there is no restriction on what vehicle I choose, and it can be wholly in line with what is of most use to me personally: sports car, 4x4, family estate etc.
On the assumption that all of the above is correct (please tell me if it isn't!), my interest is in taking a company car which is a commercial vehicle (e.g. A van). Just like any company car, it's only business requirement is to ferry me, on occasion, to meetings at client locations. The specific design of the vehicle is more a personal choice (I use a vehicle for towing and carrying tools around in my private life), in the same way that I can choose an estate, sports car etc.
So, here is the nub of my question: Commercial vehicles attract a different rate of BIK (marginal rate of tax on a notional £3k a year). Does this more favourable BIK apply, even if the vehicle isn't specifically required for the business (ie I need the use of a car, my own or company provided, in the line of my work, but it does not need to be a van), or is it a case of if it's classed as commercial, then the commercial vehicle BIK rules apply? Additionally, there are also different rules around company fuel on commercial vehicles, would these apply?
Many thanks!
As I understand it, I can take a company car. The business buys and maintains it, with the associated reclaim of vat and reduction in CT, but I pay BIK, calculated on book value, emissions etc, and can only claim a reduced value for mileage (as the wear and tear is already incurred my the company). Generally speaking this has no advantage over running a car personally and then claiming the mileage.
To have a company car, I do not need to demonstrate that I use it for work, and the BIK assumes that all use is personal (i.e. There is no pro rata of business vs private use).
Finally, there is no restriction on what vehicle I choose, and it can be wholly in line with what is of most use to me personally: sports car, 4x4, family estate etc.
On the assumption that all of the above is correct (please tell me if it isn't!), my interest is in taking a company car which is a commercial vehicle (e.g. A van). Just like any company car, it's only business requirement is to ferry me, on occasion, to meetings at client locations. The specific design of the vehicle is more a personal choice (I use a vehicle for towing and carrying tools around in my private life), in the same way that I can choose an estate, sports car etc.
So, here is the nub of my question: Commercial vehicles attract a different rate of BIK (marginal rate of tax on a notional £3k a year). Does this more favourable BIK apply, even if the vehicle isn't specifically required for the business (ie I need the use of a car, my own or company provided, in the line of my work, but it does not need to be a van), or is it a case of if it's classed as commercial, then the commercial vehicle BIK rules apply? Additionally, there are also different rules around company fuel on commercial vehicles, would these apply?
Many thanks!
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