Essentially, if you join a supercar type car club can you reclaim the VAT and if tying in the use of the vehicles around business trips, put the annual fee down as an expense?
Thought I would ask here, before asking my accountant as the HJ site is free and I am tight!
Edited by Whitney Paine on 21/07/2008 at 13:56
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I would hope not!
If you can afford the car then you can afford the tax.
The more tax you pay the less tax I should have to pay ! :)
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I've missed something, explain to me how the club membership is essential for your business?
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I guess the argument could be that it's just a car hire. You need to travel to X, so you hire a car (instead of a flight, perhaps). You drive to see your customer/supplier/etc, and you drive back. It's thus a business expense. Whether HMRC see it that way, and your accountant, I've no idea, but I can see it's worth a try.
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Essentially, you are treating it like another form of business transport. You could choose to go by taxi, plane, your own car etc, etc or in effect in this case borrow one of the clubs cars to use to get from A to B. You pays your money and you takes your choice.
People put their Bentley on the books, just as others use Audi or BMW as opposed to a G-Wiz. Some people go 1st class, others go economy. Luckily enough we don't live in a country (yet) where only the cheapest form of transport can be offset against tax.
Therefore the question should be if you are using the vehicles to go about your business - and can prove this to be the case if challenged - as opposed to personal use, can it be offset?
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Clearly the answer is yes. Just as you could choose to pay for a Lear Jet to go to your meetings rather than fly with Easyjet.
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I think it is yes also....with the proviso that you keep a complete record of where you went in the vehicle, who you saw etc, etc in case HMRC get heavy.
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the learjet v easyjet argument doesnt hold up.
For many businesses the ability to travel at a particular time or on particular routes does result in a direct benefit to the business. And actually it doesnt have to be that expensive if a group are travelling. And yes it is a better experience than business class, let alone easyjet.
In this case the hiring in of a luxury/performance vehicle does not actually deliver any benefit over the use of your existing vehicle. I suppose that if your normal vehicle is of a similar type (DB9 perhpas?) then you could justify hiring a similar standard of vehicle - although in this case you are talking about making advance plans to do so, so it isnt even that you need to hire a car for unforseen reasons.
Sure people put mercs/bmws/etc through the business. And that is perfectly legit. And they pay the tax.
Sure, put this through the business, then declare it as a bik and pay the tax.
I know - I'm such a killjoy aren't I?
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If your accountant is anything like mine he will tell you not to do it. But that doesn't mean you can't!
Seriously though it is just like car hire, so can't see why not.
I would be careful about private mileage though, log this too and pay back at a set amount per mile. Otherwise given that you have a car for quite a lot of days in the year they might try and sting you for some kind of BIK tax. And don't try and tell me that you will only use the cars for business and won't do any private mileage at all!
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Be careful. Taking advice from the proverbial "Man in the Pub" (or the online equivalent) may be free, but it can prove expensive - Speak to your accountant.
There appears to be confusion between employment expenses and trading expenses. The rules are similar but different in key areas - Speak to your accountant.
You need to look carefully at the Club regulations, but generally speaking it would be almost impossible to argue that the cost of a club membership is a travelling expense - Speak to your accountant.
Legitimate car hire is OK, but expenditure on extravagent vehicles hits the profits and tax relief is capped. Did I mention? Speak to your accountant?
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The trouble is that HMRC love these 'Boys Toys' things. I spend alot of time resolving the issues that people create for themselves even after they've had great advice from others.
My advice is always the same:
If you can afford it do it personally from taxed income and forget the tax reliefs -
If you can't afford it that way DON'T DO IT.
That way no enquiries, no professional fees, no penalties and most importantly no stress.
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