Rent out Camper Van via a ltd co?

MallyGirl

We are considering getting our VW Transporter converted to a camper van. There are quite a few websites out there these days that will market your camper van for rental to others when you are not using it - this would help fund it.

I was wondering if it made sense to run as a ltd company
- sell the van to the company
- company pays for conversion
- company pays for insurance, servicing, registration with rental website and ongoing gas servicing etc
- company gets income from rentals

would this work or would it be lots of work for little benefit?
Any downsides?
Presumably we would need to pay a peppercorn rent to hire it ourselves when we wanted to use it?
Thanks

Tallaght

I knew a couple of people who ran a camper van rental business and lots of their vehicles were returned with damage.Most customers seemed to be people going to the music festivals.

MallyGirl

That would certainly be a downside

00ec25

yes, huge downsides.
It would be a company asset which you would use personally, therefore you will have to pay annual benefit in kind income tax on the vehicle based on its manufacturer's original list price
a VW Transporter list price could be anywhere between £20k - £30k

obviously the profit the company makes from its trading activity as a vehicle rental business (have you costed the vehicle insurance in a company name???) could be taken out by you as a dividend, but unless the company is turning over upwards of £30,000+ per year, the whole idea is useless since the costs of operating the company, paying corporation tax at 19% and then taking income out as dividends will cost you a lot more in tax than simply personally taking the income as sole traders

there might be a case for putting it in Ltd company if you are happy not to take any money out at all. Instead you could get the company to pay all its profits into a pension plan which would mean the company would have no tax to pay, you won't get any income boost now, but you'd benefit in the long term.

MallyGirl

Thanks - that is exactly the sort of info I needed.
We don't need to take the income so a pension plan would work - we are only a couple of years from 55 and hoping for early retirement by 60 if not before.
TBH this was DH's idea - I am more for an easy life so I expect we will just go the sole trader route (or decide not to rent at all)

BoGoF

If you are going to do it I would go down the sole trader route initially. I think you may find it a money pit rather than a profitable business venture.

Pennywise

Tallaght wrote: »

I knew a couple of people who ran a camper van rental business and lots of their vehicles were returned with damage.Most customers seemed to be people going to the music festivals.

As long as you charge a deposit, you can at least use that to repair the damage. Anyway, charging a deposit makes people a lot more careful!

Savvy_Sue

Pennywise wrote: »

As long as you charge a deposit, you can at least use that to repair the damage. Anyway, charging a deposit makes people a lot more careful!

With that in mind, it would be well worth finding out what normal and 'bespoke' car hire companies have in their T&C. Although this is an area where you really MUST pay your own solicitor to check YOUR T&C before you start. This is not an area in which you can afford to economise!

Also you might want to start the venture by NOT taking back-to-back bookings, to allow space to sort out any issues. And you'll need to allow time for checking inventory and cleaning between hires. And I wonder if you'd technically be in breach of regulations if you were cleaning it at home and discharging the waste water into the drains ...

You will also definitely need to take credit cards from the start.

You will also need to check out your tenancy agreement / mortgage agreement if the van will be parked at home when not hired out. Especially if you are renting, regular visitors to the property can easily upset the neighbours and be a breach of your tenancy agreement.

You need to think about whether people will be able to leave their own vehicle 'on-site' when they hire yours. If there's only one driver in the hirer's party, not being able to leave it at your place could cause difficulties - and then that raises insurance questions.

I know I've gone from the barest financial questions to the nitty gritty, but they are things to consider before your DH gets too excited about the fortune to be made ...

00ec25

MallyGirl wrote: »

I expect we will just go the sole trader route (or decide not to rent at all)

in which case you will need to apportion costs between business and private use (and keep records to support that)