Cost to company of commercial jeep

E

E2005

Guest
Hi
I want to get a company car (commercial jeep) from my company and am trying to workout the cost to the company compared to paying me a salary increase.

(1) What can the company claim VAT back on - the initial purchase of commercial jeep, diesel, servicing, tyres. Am I missing anything? Is the VAT rate 21% on all these things?
(2) What is the cost of the alternative (i.e paying me an increase), the amount +12% for PRSI etc?

Thanks
E2005
 
I too am interested in the question and was about to ask it! Anyone?

Additional Questions: Do you have to be in a business that requires you to transport goods to "merit" getting a commercial jeep?

Thanks,

S
 
Company bears the cost of purchase. In the case of commercial vehicles they can claim back the vat on the purchase, diesel, repairs etc. but the jeep must meet the criteria set out by the Revenue...no side windows and no seats in the back. The company can also claim capital allowances of 12.5% per annum.

If you have full use of the commercial ie evenings and weekends then you will be charged 5% of the original market value of the jeep each year as a benefit in kind. This will be added to your gross salary.

So say the jeep was €30K then your BIK would be €1500 per annum...increasing your gross salary by €1500 and tax/prsi would be payable on this.

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In order for you to buy the jeep the company would have to pay you 30K net..assuming you are on the higher rate of tax, this equates to approx 52K....so its definatly more benefical for the company to buy the jeep and give you use of it.

The situation is the reverse in the case of a company car as the BIK is 30% of the original market value if the company pay all running costs(Eg on a car bought for 30K BIK will be 9K per annum). This is reduced if business mileage is > 15K a year...and reduces as the business mileage goes up.

In this instance it is more benefical for the employee to purchase his/her own car and charge mileage to the company.
 
I didn't think there was any BIK on a commercial vehicle.

I know plenty of people with vans that don't pay any BIK, Is this specific to Jeeps?
 
I didn't think there was any BIK on a commercial vehicle.

I know plenty of people with vans that don't pay any BIK, Is this specific to Jeeps?
Click to expand...

No it applies to all vans/commercial vehicles... once you have personal use of them ie to & from work, weekends etc.

However if the van is part of a pool eg if you work in the ESB and drive an ESB van all day but use your own car to get to/from work then there is no BIK.
 
do, thank you so much for your answer....you made it very clear. Can I ask you one other thing though....in your example of 30K....is that the proce of the jeep Including VAT? The one I am looking at is 29K Ex VAT (34,500 INC VAT). I will claim the VAT back though.

Also, do you need to be in a business that would "justify" or merit the use of a commercial. My thinking is the double cab jeeps...they have back seats but are classed as a commercial.

Thanks again,

S
 
I thought the double cabs were reclassed at least for VRT as MCGreedy was losing a heap of money due to people buying them instead of cars.
 
E2005 said:
Hi
I want to get a company car (commercial jeep) from my company and am trying to workout the cost to the company compared to paying me a salary increase.

(1) What can the company claim VAT back on - the initial purchase of commercial jeep, diesel, servicing, tyres. Am I missing anything? Is the VAT rate 21% on all these things?
(2) What is the cost of the alternative (i.e paying me an increase), the amount +12% for PRSI etc?

Thanks
E2005
Click to expand...
 
I have a vat registered company doing services ie typing faxing etc etc can I claim back the vat on a commercial jeep
 
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