# Commercial vehicles and VAT



## TheLayMan (7 Mar 2005)

I intend to buy a 4x4 vehicle, but I noticed that the price difference between a commercial and passenger model is more than 10K. Is there a logic to setup a company or even to register for VAT, in order to buy a commercial vehicle? Just want to know the pros & cons.

And when are you eligible for registering for VAT? Is it only when you setup a company or are there other criteria as well?

Thanks


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## oilean buyingtolet (7 Mar 2005)

*Vat registration*



> And when are you eligible for registering for VAT? Is it only when you setup a company or are there other criteria as well?



You need to be making a taxable supply before you can register for vat, which enables to make a vat reclaim

stuart@buyingtolet.ie


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## rainyday (7 Mar 2005)

*Re: Vat registration*

You may be already aware of this, but the obvious con is that the commercial vehicle has no rear seats, so you are restricted to driver + one passenger.


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## sluice44 (7 Mar 2005)

*Re: Vat registration*

Unless...
[broken link removed]


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## TheLayMan (7 Mar 2005)

*Re: Vat registration*

Thanks a lot gentlemen for your replies. Although a commercial vehicle would have only two doors/windows as such, I think if you buy any vehicle as a company car then you can buy it less VAT, isn't it? So I wouldn't necessarily have to buy a commercial. Just a regular with no VAT, thats if it is possible of course.

Cheers


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## Brendan Burgess (7 Mar 2005)

*Re: Vat registration*

I don't think you get VAT back on any car, just commercial vehicles. 

In the days when I used to know such things a commercial vehicle was one with no windows on the rear sides. I don't know if that is still the definition. Come to think of it, I am not even sure if that was a real definition or just an old accountants' tale.

Brendan


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## elderdog (7 Mar 2005)

*Re: Vat registration*

BTW......

I understand that it is against the law to use commercial vehicles for social, domestic or pleasure purposes


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## Imperator (7 Mar 2005)

*Re: Vat registration*

From revenue.ie

"a van means a vehicle which was designed or constructed solely or mainly for the carriage of goods or other burden, and which has a roofed area or areas to the rear of the driver's seat and no seats or side windows in that area."

As far as I understand, a driver may use a company supplied van for their own private use, but will have to pay BIK on this (at a different rate to cars) -the insurance company should also be made aware.

Tax on commercial vehicles is lower, but the insurance costs are higher........


See [broken link removed]


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## rtod (18 Mar 2005)

*Re: Vat registration*

two exceptions to bik on company vans that might be of interest:
1. private use of a van's/commercial vehicle's with a gross vehicle weight (i.e. gross laden weight) in excess of 3,500kg will not give rise to a taxable benefit in kind. 
though fair enough, maybe not a great option ;-)

2. ... not apply any BIK charge in relation to such vans, provided that the van was essentially for the purposes of the employee's work, that there was an employer requirement to bring the van home, that other private use was prohibited and the employee spent most of his or her working time away from the employer's workplace to which he or she is attached.
see full text here: [broken link removed]


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## sim (25 Mar 2005)

I had a 4x4 commercial through my company and the main benefit was that it wasn't subject to BIK as long as any private use was incidental and that the normal storage space was the work premises. This is obviously very much open to interpretation and never checked. Also it was treated as a "pool" car and open to use by more than one employee and any excessive use by anyone individual was also incidental. I was the only one that used it and got 4 years free driving out of it with all expenses petrol,maintenance,insurance tax etc paid. The tax office have leaflets on the rules associated.My experience is that commercial vehicles also cost less to tax but more to insure. You also have to get a DOE test every year i think. This is a kind of NCT for commercial vehicles which seems silly when you are only driving say a 2 year old jeep. 
Setting yourself up to save the VAT seems of little benefit when a 2nd hand model can be picked up reasonably cheap. You can drive a commercial without it being taxed as a commercial but obviously the VAT is payable. As mentioned above the lack of rear windows and seats can be a nuisance if familys involved but ideal for singletons. The main reason they are cheaper is that the VRT(vehicle registration tax applie by the govt is much lower than passenger models). Another benefit is that you can use loading bays to park (sorry I mean actively unload!). Basically just stick on the hazards and away you go. If you are thinking of buying try a landcruiser i had one and did not have a minutes bother.
Alternatively you can go for cheaper passenger models like Hyundai etc but you pay for what you get. 
There is a version of commercial (HI-Lux is one brand) i think that as a bench seat in the back. It is like a pick up but you can buy a cover for the back. an they have the benefit of rear seats and windows. They also have smaller engines which can be advantageous from a running cost,tax,insurance point of view.


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