Company van?

miniyazz

miniyazz

miniyazz

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Sheffield/Norwich
Without going into unnecessary details, I'll be doing a fair bit of agency work over the next year or so and have set up a limited company to handle this. Work will involve travelling around the country to different sites to work for a few days at a time.
Because each of these will represent a permanent workplace I won't be entitled to tax relief on my commutes.

I'm now thinking of getting a company van for my use to travel to work (work use only). I believe this would allow me to have tax relief on my fuel as everything will be paid as a company expense before tax.

Am I missing something obvious or is this a reasonable thing to do, financially?

Mileage is hard to predict but probably between 8-16k/yr. I suppose I'd be looking at the cheaper end of the market, say <£4k, to avoid losing all tax savings in depreciation and might kit it out with a view to sleeping in it instead of paying for overnight accommodation for at least some of the time.

Bear in mind my Golf doesn't return more than 30mpg on a run so hopefully my fuel economy would also improve..
 
miniyazz said:
Work will involve travelling around the country to different sites to work for a few days at a time.
Because each of these will represent a permanent workplace I won't be entitled to tax relief on my commutes.
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Are you sure this is the case? Working somewhere for just a few days does not represent a 'permanant workplace'.

I'm now thinking of getting a company van for my use to travel to work (work use only). I believe this would allow me to have tax relief on my fuel as everything will be paid as a company expense before tax.
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For this to be possible then obviously your trips are not classified as commuting to a permanent place of work - otherwise this wouldn't be possible either?
 
[TW]Fox;24368099 said:
Are you sure this is the case? Working somewhere for just a few days does not represent a 'permanant workplace'.
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I won't have a permanent workplace in the usual sense. According to Section 3.19 of the Employee Travel guidelines published by HMRC (link to my copy), each agency workplace will count as a new permanent workplace:
Agency workers3.19
Where a worker provides their services through an agency and generally attends only one workplace in respect of each engagement that workplace will usually be a permanent workplace. However, we recognise that nurses, domestic workers and others who provide their services through an agency may undertake a number of different jobs on the same day. In these circumstances, those workers may obtain tax relief for travel between those jobs, but not for travel from home to the first job and to home from the last job on each day.

Example:
Finuala is an accounts clerk who gets all her work through an employment agency. She rarely takes a job which lasts more than two weeks. Finuala always travels straight from home to work at the premises of the employment agency’s client. She is not entitled to relief for any of these journeys because each job is treated as a separate employment and so all her journeys are ordinary commuting.
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For this to be possible then obviously your trips are not classified as commuting to a permanent place of work - otherwise this wouldn't be possible either?
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This is the interesting bit - the rule is different for company vans than for company cars. Here is the HMRC info on company van tax. Normally with company cars, travel to a permanent workplace (ordinary commuting) wouldn't qualify for tax relief. However as far as I can see, with company vans ordinary commuting qualifies for tax relief, and no BIK tax is due unless it's used for private use.
 
I'm not entirely clear on the semantics (or how much it matters) but the agency is employing me via the limited company. As far as I can see I 'provide my services through an agency' whether or not that is via a limited company or not and should therefore qualify?
Either way the agency example only serves to illustrate the point - I will not have a permanent workplace and so the places I do agency work cannot be temporary places of work, so they are ordinary commuting which counts for company van tax exemption and not for tax relief via a private vehicle or company car.
Alternatively if you can argue that my registered limited company address is my permanent place of work (which it can't be by definition add I don't do work 'necessarily' there), that would be great since I could claim tax back on fuel for my golf, avoiding the whole company van issue!
 
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Travel guidelines to a client are considered up to 24 months before they become a permanent place of work, a new location is only considering a new client or clients location change if greater than 10 miles from the first assignment.

Basically you should be smashing 45p a mile for the 10k then 20p, assuming of course it's your personal van you are using rather than a company van. There is little incentive to buy a van through your company.
 
Jonnycoupe said:
Travel guidelines to a client are considered up to 24 months before they become a permanent place of work, a new location is only considering a new client or clients location change if greater than 10 miles from the first assignment.

Basically you should be smashing 45p a mile for the 10k then 20p, assuming of course it's your personal van you are using rather than a company van. There is little incentive to buy a van through your company.
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This doesn't apply where there is no permanent place of work. If you have a permanent place of work and that changes to a temporary place for up to 24 months you are quite correct. But for example if you contractually changed to a new place of work this temporary rule would not apply; it would become your new permanent place of work, and an ordinary commute.

Unfortunately the law is quite clear (see my above quote) - that quote explicitly describes the kind of work I will be doing - and I will not be eligible to claim for tax relief for 'business' mileage in my private car, as commute to those workplaces is considered ordinary commuting.
 
[TW]Fox;24368796 said:
No, miniyazz Ltd is employing you?



Surely then they are purchasing services from Miniyazz Ltd, not employing you personally? Otherwise why even bother with the limited company if you are being employed by another organisation?
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The agency pays into Miniyazz Ltd's bank account, but they have a contract with me. I'm not sure where this leaves us, it's like a crazy love triangle :p

Let's follow this through though. If they are purchasing services from Miniyazz Ltd, and I am 'employed' by Miniyazz Ltd, I am in the same situation? In this instance Miniyazz Ltd is acting as the agency, and I as the 'employee' am contracted to work at various workplaces around the country for short periods of time - workplaces which are classed as ordinary commuting.
Is this correct? It's the same situation, isn't it?
 
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miniyazz said:
The agency pays into Miniyazz Ltd's bank account, but they have a contract with me. I'm not sure where this leaves us, it's like a crazy love triangle :p

Let's follow this through though. If they are purchasing services from Miniyazz Ltd, and I am 'employed' by Miniyazz Ltd, I am in the same situation? In this instance Miniyazz Ltd is acting as the agency, and I as the 'employee' am contracted to work at various workplaces around the country for short periods of time - workplaces which are classed as ordinary commuting.
Is this correct? It's the same situation, isn't it?
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No it isnt the same.

You remain employed by miniyazz ltd, employed from home continuously. Sometimes theres work, sometimes there isnt.However periodically miniyazz ltd sends you to other locations. You can claim for travel to all of these, it is one of the core reasons agency staff do so through their own limited companies because it means they can claim for all travel and work related expenses including food which is covered by your income, before the balance is paid to you after tax/nic. Take a look at the ltd company services available for anyone working for any of the agency companies.
 
Thanks for going through that. I've had another read of those expenses guidelines and you are quite correct - this example is more relevant:
Example
Ferdinand is a computer expert who provides his services through a company which he owns. He is the company’s only employee. Each year the company has around 15 contracts with different clients around the country to supply Ferdinand’s services. He regularly travels from home to work at the premises of the company’s clients. Provided he does not expect to spend more than 40% of his working time for more than 24 months at any one site he is entitled to relief for all his journeys from home to the clients’ premises.
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That being the case, a company van would never be the best way to go about things. Even over 10,000 miles/year I'd still be far better off at 25p/mile tax relief than 20% corporation tax relief on fuel (at least until my van became horrifically inefficient and fuel-guzzling :p)

I guess my situation now is whether a second, more efficient car is in order, which is rather hard to say without knowing absolute mileages. (Assuming I bought a diseasal w/ 50mpg and did 10k/year, I would be saving only around a grand in fuel over the year compared to my Golf.. but my mileage could be double that. Minus insurance/tax/servicing)
An alternative option being to buy some sort of camper, with an estimated accommodation saving of £40-80/wk - but living out of a van might get annoying after a while, even if it's just for a couple of days at a time :p
 
You can still charge the YOUR LTD the 45ppm/25ppm

Fox is correct.

I think you need to speak to an accountant. Especially if youve set up a ltd on your own without the help of one
 
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