Using a Vehicle For Business – Pt 3
Yesterday we saw how Mr. Murphy (a sole trader) could get a BMW 5 Series for free, courtesy of the Tax Man. What if Mr. Murphy would prefer a 5 seat SUV?
E.G. the Mitsubishi Pajero 5 seat business model – a luxury 4WD SUV officially classed as a commercial with road tax of €333 – as a commercial he can reclaim €10k VAT and write off €45k against tax giving a tax saving of €22.5k over a number of years and a net cost of only €22.5k on a vehicle that retails for €55k!
Revenue are no longer giving the N1 business classification to new vehicles of this type but there are still some available on the forecourts including pre-owned models.
However – if buying through a Limited Company beware of BIK (see article 1)– although a commercial for VAT, VRT and Road Tax it is a passenger vehicle for BIK – however, tomorrow we will tell you how to avoid BIK if the vehicle qualifies as a ‘’pooled vehicle’’.
Note: If a vehicle was originally a passenger model and subsequently converted to a 2-seater it is still regarded as passenger for BIK.
This series of articles are for illustrative purposes only and do not constitute professional advice. To get in touch please e-mail email@example.com. Article 4 will be posted tomorrow.