Commercial 4 seater

medias

Is there a best way to buy a second hand car/vehicle via a limited company as a business expense. It would be used mainly for business use but with some family use at weekends. Hence the need for 4 seats.

I believe that some rules changed last year, but is buying via business and paying BIK the best way or is there legal ways around this by buying certan vechicles?

colm_mcm

You could buy a crewcab (Kuwaiti 4 Seat, Discovery crewcab, Land Cruiser business edition etc)., but they’re only supposed to be used for business purposes. You should obviously be paying BIK on it too.
Now most people that have these are using them for purposes other than business but that’s another matter.

Wailin

medias wrote: »

I believe that some rules changed last year, but is buying via business and paying BIK the best way or is there legal ways around this by buying certan vechicles?

Out of curiosity, what rules where changed last year?

rn

They did tighten laws on crewcab commercials, they can't be used for family use especially kids and the school run. Unfortunately one of these, Ford ranger I think, was involved in a fatal school yard accident around Christmas, so I expect a stricter enforcement to follow.

While full commercial enjoys lowest bik, you Can always buy a passenger vehicle in which case the business milage dictates your tax liability
https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-of-company-cars/how-to-calculate-the-value-of-the-benefit.aspx

I think there is fine print if it's passenger but business branded, so you could check that out if you don't mind your business logo on side of your motor.

medias

rn wrote: »

They did tighten laws on crewcab commercials, they can't be used for family use especially kids and the school run. Unfortunately one of these, Ford ranger I think, was involved in a fatal school yard accident around Christmas, so I expect a stricter enforcement to follow.

While full commercial enjoys lowest bik, you Can always buy a passenger vehicle in which case the business milage dictates your tax liability
https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-of-company-cars/how-to-calculate-the-value-of-the-benefit.aspx

I think there is fine print if it's passenger but business branded, so you could check that out if you don't mind your business logo on side of your motor.

Yea maybe the BIK is the way to go. Given they value the vehicle at its origional price I guess it makes more sense buying a newer car? Is the saving of BIK that much over just paying yourself and buying a car privately?

rn

Yes, once you have decent business mileage, it's the cheapest way to keep a new car on the road.

It's not the cheapest motoring...

rn

rn wrote: »

They did tighten laws on crewcab commercials, they can't be used for family use especially kids and the school run. Unfortunately one of these, Ford ranger I think, was involved in a fatal school yard accident around Christmas, so I expect a stricter enforcement to follow.

The main reason people buy crew cabs is so that they can use them for family use otherwise they would get two seat commecials there isn’t a hope of people stopping using them or any type of enforcement. Anyone I know who drives one has a baby seat or two permanently attached.

Why would a fatal accident in one cause enforcement? Does the tax disc somehow make it more dangerous around a school?

BnB

Jaelyn Disgusting Skirmish wrote: »

...... Why would a fatal accident in one cause enforcement? Does the tax disc somehow make it more dangerous around a school?

I wouldn't put it past the RSA

rn

Your crew cab if taxed commercially is illegal to put family into it on any occasion, unless the family member is employed by the business. Your commercial can be impounded on the school run.

If you want to use it for occasional or predominantly family use, you must tax it as a passenger vehicle in which case under company car rules, you pay tax based on business mileage travelled.

They are a more dangerous for pedestrians due to their size and limited viewing capability. And they are not most environmentally friendly choice. So I can see why there might be a drive towards enforcement on the back of that particular accident.

BnB

rn wrote: »

Your crew cab if taxed commercially is illegal to put family into it on any occasion, unless the family member is employed by the business. Your commercial can be impounded on the school run.

That is true. The revenue were setup one morning in a local school in my (rural) area checking for people dropping kids off in commercially taxed vehicles

rn wrote: »

They are a more dangerous for pedestrians due to their size and limited viewing capability. And they are not most environmentally friendly choice. So I can see why there might be a drive towards enforcement on the back of that particular accident.

This is about a tax disk - Not a vehicle. Are you saying the commercial tax disk is somehow more dangerous that a private tax one...?

BnB

medias wrote: »

Is there a best way to buy a second hand car/vehicle via a limited company as a business expense. It would be used mainly for business use but with some family use at weekends. Hence the need for 4 seats.

I believe that some rules changed last year, but is buying via business and paying BIK the best way or is there legal ways around this by buying certan vechicles?

I have looked into this for years, and no matter what way you come at it, BIK makes it unworkable. (Which in fairness to revenue, that is exactly what BIK is for). No matter what way I ever looked at it, I could never find that it made financial sense to do it through the company.

In particular, what really catches you is that BIK is based on the OMV value of the car. i.e. If you buy a 5 year old car, you pay BIK based on the NEW price of the car. I found because of that, going down the company & BIK route you would probably break even Vs doing it privately if you buy or lease a NEW car. But, if you go for a second hand car, you actually make a loss on going the company & BIK route.

The other thing that catches you out with BIK in your situation is that you do not get any reduction for Crew Cabs like you do in tax. So if you go the Crew Cab route and you get a commercial with 5 seats and you pay the reduced commercial tax. But you still pay the same higher rate of BIK as if it was a passenger car. You can only get the reduced rate of BIK for a true two seater commercial.

When you take into account for a crew cab that you get commercial tax and you can get the VAT back, even with the high BIK, it will work out a small bit cheaper to go through the company - but not by much and it is only on newer more expensive vehicles that you would really notice any difference.

If you were really determined, you can get around it by setting the car up as a company pool car. i.e. A car that is used in the company that a few people use. You would have to get open insurance on it to show that other people drive it too. You also have to sign off to say that you leave the car at the work premises and that you have no access to it outside of work hours (even for travelling to and from work). If you are a small one or two man operation you will be picked up on it straight away by Revenue. If you have a bigger company and you feel you can justify it a bit better you could try it, but be prepared to jump through hoops for it.

Any way I looked at it over the years, I always come to the conclusion that it would always work out cheaper to just pay yourself the money, pay the tax on it and buy the car privately. Then claim back mileage from the company for the work miles that you are doing.

rn

rn wrote: »

Your crew cab if taxed commercially is illegal to put family into it on any occasion, unless the family member is employed by the business. Your commercial can be impounded on the school run.
.

Look we know that technically these are the rules but they are never enforced and every single commercial in the country gets used for private use also, a large number of commecials are used completely for private use. I’m driving a Commercial Landcruiser and it’s about 80% private use and commuting and a very small bit of farm related use then. I wouldn’t have to drive more than 1km from my house to find 5 more people driving crew-cabs as family cars or commercial vans/jeeps for a combination of private, commuting and business use. I’ve yet to come across a person who pays private tax on a vehicle that can be taxed commercially and I know a lot of people driving these types of vehicle.

You see an odd person claim they are “cracking down” on it but I don’t believe any of it as the only place you even see hint of a rumour if it is on here and frankly I don’t believe it as there is zero evidence in the real world.

Wailin

Very interested in this thread.

Looking ahead to next year at getting a 4x4 suitable for some off road and Winter driving up the Sally Gap and such areas.

I don't have a private business but do landscape photography amateur/part time. Driving a rear wheel drive beemer which just doesn't cut it in those conditions and u wouldnt even attempt it.

What are my options? Ideally I'd love a crew cab (eg mitsubishi L200, ford ranger etc). Something like a BMW x5 would not be capable enough imo, or any SUV for that matter.

Would it be lunacy to buy a crewcab and tax/insure it privately to avoid any risk of getting into trouble with the law?

BnB

Wailin wrote: »

Very interested in this thread.

Looking ahead to next year at getting a 4x4 suitable for some off road and Winter driving up the Sally Gap and such areas.

I don't have a private business but do landscape photography amateur/part time. Driving a rear wheel drive beemer which just doesn't cut it in those conditions and u wouldnt even attempt it.

What are my options? Ideally I'd love a crew cab (eg mitsubishi L200, ford ranger etc). Something like a BMW x5 would not be capable enough imo, or any SUV for that matter.

Would it be lunacy to buy a crewcab and tax/insure it privately to avoid any risk of getting into trouble with the law?

Hi Wailin - The first question I would ask is, how much mileage and what kind of driving would you be doing as part of your day to day driving and how much would you be doing as part of the weekend / photography.

The reason I ask is that, I was in a similar enough position. Not into photography, but I do need a proper 4X4 for a small bit of farming and pulling a box every weekend. But during the week, most of my driving is straight forward with maybe one run a week to the Dublin & back (from Clare).

I had a SUV (Outlander) for a year or two and it was OK without being great at both jobs. It was comfortable enough for the motorway driving but I still would have been happier in a car. It was also fairly good to pull a box and it had 4X4, but I did end up having to replace a gearbox which lead me to believe that maybe it just wasn't suited to what I was doing with it.

Anyway, this year I changed my daily driver back to a saloon car and I bought an old Pajero for the messing around at the weekend. It is probably a slightly more expensive option but I am happy out with it.

I can keep the car clean & in good condition and not worry about damaging it with any weekend stuff. On the other hand, with the jeep, when I'm out at the weekend, I never have to worry about throwing dirty gear in the back or hopping in with muddy boots etc

Also, I do a good bit of driving for work - I still love driving, but I think it feels great at the weekend to sit into something different. Physiologically, I find it helps you completely switch off from work.

Wailin

Great help there BnB, and it is something that crossed my mind as well. Buy an old 4x4 for the weekends up the mountains.

80% of my driving is normal day to day stuff but if i had a 4x4 I'd definitely use it's abilities a lot more and spend more time in places where my own car couldn't go.

Something to consider for sure.

W123-80's

Jaelyn Disgusting Skirmish wrote: »

Look we know that technically these are the rules but they are never enforced and every single commercial in the country gets used for private use also, a large number of commecials are used completely for private use. I’m driving a Commercial Landcruiser and it’s about 80% private use and commuting and a very small bit of farm related use then. I wouldn’t have to drive more than 1km from my house to find 5 more people driving crew-cabs as family cars or commercial vans/jeeps for a combination of private, commuting and business use. I’ve yet to come across a person who pays private tax on a vehicle that can be taxed commercially and I know a lot of people driving these types of vehicle.

You see an odd person claim they are “cracking down” on it but I don’t believe any of it as the only place you even see hint of a rumour if it is on here and frankly I don’t believe it as there is zero evidence in the real world.

Out of interest whilst this is a tax avoidance technicality we are talking about, is there any danger that an insurance company would use incorrect use of vehicle as a reason to not pay out on a claim in the event of an accident?
So a commercial vehicle/crew cab, taxed commercial is involved in a two car collision. The commercial vehicle is carrying kids. They are hurt. Are they covered by the insurance?

W123-80's

W123-80's wrote: »

Out of interest whilst this is a tax avoidance technicality we are talking about, is there any danger that an insurance company would use incorrect use of vehicle as a reason to not pay out on a claim in the event of an accident?
So a commercial vehicle/crew cab, taxed commercial is involved in a two car collision. The commercial vehicle is carrying kids. They are hurt. Are they covered by the insurance?

Yes it’s covered, all commercial insurance policies also include social, domestic and pleasure use in other words private use. Tax classes are of no concern to insurance companies and they know full well that every commercial is also used privately.

Even if you tax it privately you still have to get commercial insurance as they consider them commercial vehicles regardless of the tax disc and won’t sell you a private policy.

W123-80's

Jaelyn Disgusting Skirmish wrote: »

Yes it’s covered, all commercial insurance policies also include social, domestic and pleasure use in other words private use. Tax classes are of no concern to insurance companies and they know full well that every commercial is also used privately.

Even if you tax it privately you still have to get commercial insurance as they consider them commercial vehicles regardless of the tax disc and won’t sell you a private policy.

Thanks for that!
I often wondered about it is all.

Markcheese

Dunno if it makes any difference to the op, but BiK on an electric car is zero... To get an SUV style (2wd) you'd have to get a new one, but theyre available..

rn

BnB wrote: »

This is about a tax disk - Not a vehicle. Are you saying the commercial tax disk is somehow more dangerous that a private tax one...?

I am saying pickups are more dangerous that your regular car to pedestrians, especially small children.

Pickups are the most common "commercial" in the school yard because people are using them as personal vehicles. If people taxed them as regular passenger vehicles and they are on a level playing field with the regular family car, we would see a lot less of them.

It's not so much about a tax disk - but tax evasion. Tax avoidance is when you legally reduce your tax bill. In this case it is illegal to use a commercially taxed crewcab for personal business.

BnB

rn wrote: »

I am saying pickups are more dangerous that your regular car to pedestrians, especially small children.

Pickups are the most common "commercial" in the school yard because people are using them as personal vehicles. If people taxed them as regular passenger vehicles and they are on a level playing field with the regular family car, we would see a lot less of them.

It's not so much about a tax disk - but tax evasion. Tax avoidance is when you legally reduce your tax bill. In this case it is illegal to use a commercially taxed crewcab for personal business.

I'll leave it - I don't want to derail the OP's thread

Mad_maxx

Wailin wrote: »

Out of curiosity, what rules where changed last year?

VRT and road tax changes, put it this way, you used to be able to buy a new ( business class /not passenger) landcruiser with seats in the back for 60k and road tax of 330 per annum

Now those are near 80 k and the road tax is over a grand, effects landcruiser, discovery etc

BnB

Mad_maxx wrote: »

VRT and road tax changes, put it this way, you used to be able to buy a new ( business class /not passenger) landcruiser with seats in the back for 60k and road tax of 330 per annum

Now those are near 80 k and the road tax is over a grand, effects landcruiser, discovery etc

As far as I know, (although open for correction here) the law also changed so that you can no longer "Convert" existing jeeps and vans into Crew Cabs for tax purposes.

You used to be able to take an existing jeep (a lot of Pajeros were used) and for a few hundred quid get it officially converted to a crew cab. Now it has to meet the specs the day it leaves the factory or at least the first day it is registered.

However, anything that was converted and registered before the change in law is still a Crew Cab which is why some of these are getting more valuable on the likes of done deal.