Van purchase in a company

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LynWest
LynWest Registered Posts: 122 Beyond epic contributor 🧙‍♂️
Hi sorry not been on here lately; had a couple of bereavements in the family that have meant i have been more focused on family; but i'm back now. Hoping that April is going to be the month to kickstart my year!

i have the director of a construction business wanting to buy a van through the company that he then wants the sub contractors to use when working for him. He is VAT registered by the way

He doesn't want to get into the employment and taxable benefit scenario whereby HMRC say you are letting them use this van therefore they are an employee and not a subbie, as he will from time to time go back to the same sub contractors.

His thought on the situation is that he would buy the Van claim back the VAT, then lease it to one of his most regular subbies for a one off payment of the price of the van (price to include VAT). His subbie could then use this van whenever he was working for the company. This seems to me a complicated way of doing things as ideally he wanted to signwrite the van, which he could only do if there was a clause in the lease, and not sure how other subbies would be entitled to use the van when they were working for him and the leasee wasn't just complicating the matter further!:crying:

He has a van himself; which he uses for him when he is working. Can he not have another van which is classed as a pool car which is used by whichever subbie he has at the time to do the work? As a pool van this would then not raise any issues of being a taxable benefit as long as subbie paid all petrol costs or that the subbie is actually an employee would it? Or is meerly the fact that the subbie is using the companies equipment make the subbie an employee and not a subbie??? Really not sure anymore.

If anyone has any ideas or pitfalls that i could quite easily fall into then please let me know, it would be much appreciated. Thanks x

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  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
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    A subcontractor using a companys van does not make them an employee. I would have no problem in the company buying the van and making it available to whoever needs it.
  • LynWest
    LynWest Registered Posts: 122 Beyond epic contributor 🧙‍♂️
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    Thanks groundy, i didn't see a problem, but then he started to talk about HMRC saying that the subbies were employees if he gave them a van and i started to think too much about it. must remember confidence in my convictions i'm the one doing the accounts and he is the one building the houses!! Many thanks :) x
  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
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    No Problem Lyn

    HMRC will try and scare clients pointing to lots of irrelevant indicators of employment, you just need to ask yourself would the subbies stand up to the three main tests which are:

    1. Mutuality of Obligation
    2. Substitution
    3. Control

    As long as your happy with these the rest are minor points

    Cheers

    Ste
  • Dean
    Dean Registered Posts: 646 Epic contributor 🐘
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    2. Personal service :001_smile:

    Regards

    Dean
  • LynWest
    LynWest Registered Posts: 122 Beyond epic contributor 🧙‍♂️
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    Thanks peeps, i'm happy :) x
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