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Pickup or 4wd car is a car tax deductible at all?


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So I'm a sole trader starting a new buisness, I recently bought a transit tipper but iv just been asked about woodland work... so thinking I need to sell my current small van that I was using for freelance climbing and the family car and either buy a pickup(probably a ranger 28mpg) or a 4wd SUV(probably VW Tiguan 40mpg) 

 

Is it right that a pickup is tax deductible but a 4wd car wouldn't be ? 

 

A car would be cheaper and have much better mpg. The fuel saving over time might negate the tax saving anyway. Which as it would mostly be for the Mrs to drive around would be preferable... I just need to have an occasional 4wd option which could tow. 

 

What are peoples thoughts on this?

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As a sole trader you have the option to run a vehicle (or vehicles) in a variety of ways.  One of these is to 'charge' your business a mileage rate and then cover the costs yourself.   Another, which I use, is to put ALL of the costs for the vehicle against the business and then pro-rata an amount for private use.  If you are VAT registered this means that you are able to reclaim ALL the vat on fuel, repairs etc, as well as putting insurance against the business.  You can also depreciate the vehicle using your capital allowances.

 

What you might be thinking about is the situation where, if buying a vehicle, you are able to reclaim the VAT if it is a commercial vehicle (provided the vendor is VAT registered) but cannot if it is a private vehile (ie car)

 

My wife and I both have L/R Discoverys of the non-commercial type and are able to put all the costs against our businesses and pay a relatively modest amount towards the total from our earnings.  In the past I have also put family estates through the business in the same way.

 

If in doubt speak to your accountant, but the above works for me.

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A car is tax deductible. I've done it. 

But if you're using it for anything other than commuting to a place of work, one issue can be getting commercial insurance to cover it for work duties. 

Edited by Gimlet
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Best option/compromise would be a 4x4 double cab pickup in my experience if you want a vehicle for private and work use, cars tend to get trashed inside carrying gear and fuel shouldn’t be carried inside a car, I had a pickup, then went 4x4 SUV then switch back to pickup as car was getting trashed and I didn’t feel safe carrying fuel inside the car. The tax side of things has been covered. 

Edited by Vedhoggar
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The other difference is the tax you can claim back on the purchase. A commercial vehicle is simple - just 100% expense first year in your annual investment allowance. The car you have to go with capital allowances which is a % based on when you buy it, age of vehicle, CO2 emission etc. 

Capital allowance is of course the kind of thing you pay an accountant for, I wouldn't be trying to work that out myself.

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26 minutes ago, Dan Maynard said:

The other difference is the tax you can claim back on the purchase. A commercial vehicle is simple - just 100% expense first year in your annual investment allowance. The car you have to go with capital allowances which is a % based on when you buy it, age of vehicle, CO2 emission etc. 

Capital allowance is of course the kind of thing you pay an accountant for, I wouldn't be trying to work that out myself.

That's what your accountant is for. Mine is very good at squeezing out the maximum benefit from such things. Also, I think fuel on a car is a percentage allowance as well. 

 

My ideal vehicle would be a 4x4 van. I'm selling my pickup because it's 20 grand tied up in something that isn't actually that useful apart from the 4WD bit. I can't get much in the back, I can't put anything on the roof and I never carry passengers in the back seats. 

If my Caddy van was a 2.0 L Maxi with a ladder frame chassis and 4WD, it would be my perfect vehicle. Shame no one makes them.

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1 hour ago, Gimlet said:

That's what your accountant is for. Mine is very good at squeezing out the maximum benefit from such things. Also, I think fuel on a car is a percentage allowance as well. 

 

My ideal vehicle would be a 4x4 van. I'm selling my pickup because it's 20 grand tied up in something that isn't actually that useful apart from the 4WD bit. I can't get much in the back, I can't put anything on the roof and I never carry passengers in the back seats. 

If my Caddy van was a 2.0 L Maxi with a ladder frame chassis and 4WD, it would be my perfect vehicle. Shame no one makes them.

Yes absolutely, let the accountant worry about the tax you need the right vehicle for the job.

 

4x4, van, 3.5t towing, roof rack for ladders, low depreciation - ended up with a Defender as the weirdly sensible option. No good if you do any mileage though, too bloody uncomfortable. Also I think I was lucky to find a TD5 with only 65k miles and rust free chassis for not outrageous money.

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20 hours ago, Gimlet said:

That's what your accountant is for. Mine is very good at squeezing out the maximum benefit from such things. Also, I think fuel on a car is a percentage allowance as well. 

 

My ideal vehicle would be a 4x4 van. I'm selling my pickup because it's 20 grand tied up in something that isn't actually that useful apart from the 4WD bit. I can't get much in the back, I can't put anything on the roof and I never carry passengers in the back seats. 

If my Caddy van was a 2.0 L Maxi with a ladder frame chassis and 4WD, it would be my perfect vehicle. Shame no one makes them.

Caddy Commerce, Commerce Plus and Commerce Pro in both SWB and Maxi are available in 4Motion versions (see May 2022 brochure).

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