Insurance, Tax & VAT

All Questions

• If I am self-employed, how much of the outlay - e.g. initial rental - will come off my yearly tax bill?

  Our expert Rob answered... Hello Les, thank you for getting in touch. The amount that will come off your monthly tax bill can vary on many different factors. If you would like to discuss this in further detail, please feel free to contact one of our specialists direct on 01442 838193 who will be able to find the very best quote for your circumstances. Kind regards, Richard Wells. ?

• Is a pickup truck classified as a commercial vehicle & can VAT be reclaimed on monthly rental payments?

  If a pickup truck's payload is larger than 1000kg, then it is classed as a commercial vehicle.

  You may be able to reclaim VAT if your business is VAT registered & the vehicle is used only for business purposes.

• If I'm not VAT registered what is the best finance option for me and can I claim any vat back?

  Our expert Mike answered... Hello Dan, thanks for your question. There are a few options available to you which will all depend on what you would like to happen at the end of the contract. These are: hand the vehicle back to the lease company, part exchange the vehicle for another or sell it on to a 3rd party or taking ownership. If you are currently not VAT registered then you will not be able to claim any of the VAT back. Kind regards, Mike Daly.

• Can I offset any lease costs against corporation tax?

  Our expert Gary answered... Hi Adam The answer is yes you can claim the excluding VAT costs against Corporation Tax. I would however check you BiK (Benefit in Kind) position carefully. As you mentioned Corporation Tax, I'm assuming you are trading as a limited company. If your use travelling to and from work is classed as commuting you may be liable to be taxed on £3,000 (the current benefit for commercials / vans). I would check this with your accountant.

• What would be the tax liability for our company and what would the tax liability for the individuals if both are 22% tax payers, if we leased pickups?

  Our expert Gary answered... The business can claim the VAT back on the purchase price (which should be restricted by any private use element) and then claim writing down allowances on the capital cost (assuming you purchase and not lease the pickups). You may be able to claim 100% write down in year one through your Annual Investment Allowance which is ?100,000 this financial year.

  For the drivers, there is a fixed ?3,000 annual taxable benefit for private use, plus a further ?550 if there is any private fuel provided. Assuming there is private fuel, this gives a total benefit of ?3,550 which for a 20% taxpayer gives a charge of ?710 per annum (this is the actual amount of tax paid by each individual for the private use of the vehicle and private fuel).

  As always, you should check this out with your Tax Inspector before committing to obtaining these vehicles.

  You may want to consider contract hire instead of purchasing the vehicles, in which case you can offset every rental against your company's tax position. This will not affect the drivers' tax position.

• How do I lease a vehicle so it's cost is a fully allowable tax expense?

  Our expert Mike answered... Hi Ann, thank you for getting in touch. There are three main types of leasing options available and will all have various options at the end of contract. With the options that are available not being VAT registered is not a problem and out of the three options available two of these will be fully tax efficient for you.

• My car lease is over on the 9th sept. The road tax is now due as the car is 3 years old. Do I have to tax it before getting it collected?

  Our expert Mike answered... Hello Lynne, thanks for your question. Subject to the type of lease you have will determine what happens. For example, if you have a contract hire the vehicle tax will automatically get renewed. If it is a finance lease, the lease company again renew the tax for you and once the vehicle is sold on to a 3rd party the difference will be refunded back to you. If you would like to discuss this in further detail, please feel free to contact any of our specialist direct on 01442 838193 so we can discuss the options in greater detail. Alternatively, you can drop me an email with your contact details and I'll make sure one of my team give you a call. Kind regards, Mike Daly.??

• Do I have to be VAT registered?

  Our expert Richard answered... Hi Jed, thanks for your question. No, you don't have to be vat registered. There a three main types of leasing options available and will all have various options at the end of contract. With the options that are available not being VAT registered is not a problem and out of the three options available two of these will be fully tax efficient for you. If you would like to discuss this in further detail, please feel free to contact one of our specialist direct on 01442 838193. Kind regards, Richard Wells.

• What is the best way to go as in tax relief if I am a sole trader?

  Our expert Gary answered... Hi Ken. Without knowing more about your situation it?s hard to say which is the best option, but the good news is that you have plenty of choice! I?d suggest as a first port of call that you discuss this with your accountant, who can tell you more about your own tax allowance. We also have a tax specialist on hand to give advice, which a member of our team can arrange for you ? you can contact them on 01442 820554. If you'd like to read more about van tax, you can find some further information here: http://www.vanarama.co.uk/finance-info/van-tax-explained.html. To summarise, commercial vehicles taken through us using any business funding method are 100% tax deductible. For contract hire and Finance Leasing, you can offset payments over the year. For Lease Purchase, the offset percentage will depend on your corporation tax over the year and your Annual Investment Allowance. As you can see, this depends a lot on your individual circumstances, so your accountant will be able to give advice on what might work best for you. Thanks, Andy.

• Is the monthly payment inclusive of VAT?

  Our expert Mike answered... All business lease prices are excluding VAT. All personal lease prices are including VAT. This will be shown on the prices.

• Do I need to be self employed to claim my lease rentals against tax? I am about to start a new job for which I can choose a company car or car allowance, also I can be PAYE or self employed. I could choose a company Prius with low BIK payments, they will pay an additional per mileage amount to cover fuel, or I thought of leasing a double cab pick up. I believe I can claim tax relief on the lease payments but do I need to be self employed to do this or is it allowed for PAYE, and does it also apply if I am paid a car allowance. Also, can I claim the difference between the 45p/20p mileage rate against tax if I am paid a car allowance. I will be a 40% taxpayer.

  Our expert Gary answered... Yes you would need to be self employed to claim the lease rentals against tax.

  If you are paid a car allowance and are employed, this will be treated as normal salary for Tax and NI purposes.

  If you are employed, the current tax free limits for mileage reimbursement under the AMAP (Authorised Mileage Allowance Payment) scheme are 45PPM and 25PPM. If you are paid at a lower rate than these, yes you can claim the difference against your taxable income. For example, if you do 10,000 miles and are paid 25PPM, your are 20PPP X 10,000 under the limit. This equates to ?2,000 which you can offset against your salary. So in other words you don't pay tax on ?2,000 of salary in addition to your personal allowance (currently ?8,105).

  Finally, if you are self employed and are paid either a car allowance or mileage (or both), this is treated as normal business income in addition to whatever you charge for doing the job/s. Then you can either run the vehicle in your 'self employed' name, or run it personally and the business can pay you a mileage allowance for all business miles.

  Hope that helps.

  Andy

• Do you tax the vehicles or does the person leasing the vehicle??

  Our expert Richard answered... Your question depends on which lease you choose. If you choose a contract hire or contract purchase the road tax is included for the duration of the contract. Finance lease will include the first year's road tax, however, the finance company will then invoice you for the next year.

• I have spoken to my insurance company about possibly adding one of your vehicles to my policy, they would like to know if the log book would go into my name as they say they cannot insure me on the vehicle if it doesn't.

  Our expert Richard answered... With the leases we offer, you will not own the vehicle so you will not be on the Logbook unfortunately as you are not the owner of the vehicle.

• What happens if I lease a vehicle and it is written off after an accident. My insurance company will pay the pre accident value to you. Will there be any other costs?

  Our expert Rob answered... Many insurance companies will have different agreements in place and its always worth checking with your own provider what they will cover on your agreement.

• What are the implications of having an accident in a leased vehicle?

  Our expert Mike answered... Hi Neil, thanks for leaving your question on our website. If you were in a situation where your vehicle was written off, as I am sure you are aware the insurance company will pay out a certain amount. The difference between what the insurance company would pay you and the outstanding amount left on the agreement at that time would need to be settled. This would need to be settled by you Neil, unless you have Guarantee Asset Protection (GAP) in place with your insurer.

• Do your vehicles come with insurance?

  Our expert Rob answered... Insurance isn't included as standard with the lease of your vehicle, it is your responsibility to source insurance.

• If I lease a van am I able to insure more than one person to drive the van?

  Our expert Rob answered... Yes. When you lease a vehicle if the lease is in your name you will need to be the main driver on the insurance policy but you can the add other named drivers onto your policy too.

• How do you go about insuring a leased vehicle. Who is the registered owner of the vehicle?

  Our expert Mike answered... It will be your responsibility to make sure the vehicle is insured with a fully comprehensive policy. The registered keeper of the vehicle would be the financy company your lease is held with.

• What happens if the van is written off and the insurance payout is lower than what you value the van at?

  Our expert Mike answered... If your vehicle is written off and the value offered does not meet the settlement amount, you would ned to cover the difference. Gap Insurance would protect you from this situation and cover any shortfall.