Leasing/Renting my personal vehicle to my own companies

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andyuk2005
andyuk2005 Posts: 137 Forumite
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Hi all,

Bit of a complicated question (for me at least!). I'm hoping one of you will be able to help me out!

I own and run 2 LTD companies, lets call them C1 and C2.

I plan on getting a vehicle (a small petrol van) which I want to use for personal use (popping to the supermarket etc) and also for trips when transporting small good for C1 and C2.

I understand that I wouldn't be able to buy the van VAT free through one of the businesses, as HMRC are strict on what is classified as a works vehicle, as although this is a small van, it will have seats throughout and will have about 50% use by me personally and not for business.

Therefore I thought that if I bought the van in a personal capacity, I could then lease the vehicle to either of the companies whenever I would use it for a job.

I would keep detailed records of when I used the van for a job, such as milage, date etc. The vehicle WILL be branded (vinyl stickers) with the logos etc of both of the companies.

I understand that I would charge my own companies a reasonable market rate, which is fine. One of my businesses is VAT registered, but I can't see how that will affect things.

A similar van from a rental company charges about £45 per day.

Does that all sound quite reasonable and proper? Just checking that it won't appear dodgy to the tax man!

Thanks for your help folks

Comments

  • Pennywise
    Pennywise Posts: 13,468 Forumite
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    What do you hope to achieve? Why not just claim the HMRC allowed 45p per mile? Or alternatively, buy it through one of the companies, pay the benefit in kind tax/nic on it and recharge the other companies use at 45p per mile.
  • bris
    bris Posts: 10,548 Forumite
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    Would you not have to file a personal tax return if you lease the van to your companies? This is one your accountant would be best to advise you on.
  • antrobus
    antrobus Posts: 17,386 Forumite
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    andyuk2005 wrote: »
    ...
    Does that all sound quite reasonable and proper? Just checking that it won't appear dodgy to the tax man!...

    Not at all. So long as you remember to provide HMRC with details of the profits of your new vehicle rental business.

    You'd have to crunch the numbers to see whether was any point.
  • rhysadams
    rhysadams Posts: 303 Forumite
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    I think BRIS is correct, essentially you will be making a profit on your personal van and therefore have to pay profit on the rentals. I'd got down one of two rates:


    1. Purchase the vehicle from yourself, so it belongs to the company. Then pay BIK, etc on the van for personal use. This used to be a lower rate.
    2. Claim mileage from the business at 45ppm, but keep detailed records. I use Google Maps with Timeline on and do a monthly spreadsheet.
  • andyuk2005
    andyuk2005 Posts: 137 Forumite
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    Thanks for your help guys, sorry for the late reply, I was waiting to hear back from my accountant.

    It all gets quite complicated as it is 2 limited companies and personal use with just 1 vehicle.

    It sounds like the sensible option is to pay myself 45ppm for the business use from the company, although my accountant says the 10,000 miles @ 45p is shared across both companies as they're connected. This shouldn't be a problem for me.

    Can anyone tell me if its okay to purchase fuel through the company card, on top of the 45ppm? Is that accepted? One of the companies is VAT registered so I could also get VAT back.

    Just thinking of the most convenient and also economical method here!
  • Pennywise
    Pennywise Posts: 13,468 Forumite
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    andyuk2005 wrote: »
    Can anyone tell me if its okay to purchase fuel through the company card, on top of the 45ppm? Is that accepted? One of the companies is VAT registered so I could also get VAT back.

    No, the 45p covers all costs. You can claim input VAT on a proportion of the mileage rate - the HMRC website has the figures which depend on fuel type and CO2.
  • andyuk2005
    andyuk2005 Posts: 137 Forumite
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    That's a real shame, it seems to me the 45p really doesn't cover realistic costs for use of the vehicle for business purposes! I suppose that is HMRC!
  • Curveygirl
    Curveygirl Posts: 90 Forumite
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    Sounds like you need to buy a better van!
    Ssshh - I might know about deals in/near Keswick
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