Client Expenses Dilema
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Hi Everyone
I have a client who is a self employed lorry driver through his own limited company. He has gone and bought a van and wants to know what expenses he can claim for in relation to the van. Had he have been a plumber or a painter and decorator (for example), I would have suggested that he can claim for all the costs associated with the van but as he is only using the van to get him from his house to his lorry, I feel that the expenses would be unjustified, especially as he would be putting through all his fuel receipts with most of it relating to personal use. I suspect that the reduction in tax would have been the main driver in the decision to purchase the van.
What are other peoples thoughts on this?
Thanks
Don
I have a client who is a self employed lorry driver through his own limited company. He has gone and bought a van and wants to know what expenses he can claim for in relation to the van. Had he have been a plumber or a painter and decorator (for example), I would have suggested that he can claim for all the costs associated with the van but as he is only using the van to get him from his house to his lorry, I feel that the expenses would be unjustified, especially as he would be putting through all his fuel receipts with most of it relating to personal use. I suspect that the reduction in tax would have been the main driver in the decision to purchase the van.
What are other peoples thoughts on this?
Thanks
Don
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not a expert in tax as previously mentioned but to my layman understanding you have answered your own question as it wouldnt meet the wholly and exclusively criteria0
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If the van was used partly for business an adjustment for private use would be required. In your case it looks like we have 100% private use (although it is not clear whether the lorry is parked at the same place every day). The trader is entitled to put all his receipts through his bank account if he so wishes but only the business proportion will be allowable as a deduction from his profits.0
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Had it of been a car then I would not have an issue with this but I'm sure that vans are treated differently, hence me getting a second opinion.0
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I use the term self-employed to describe a person that sources their own work and is not under the control of another person i.e. they are not an employee reporting to a manager. I then split self-employed people into either sole traders or sole directors. That's just how I think.
In this situation, the person operates through a limited company. The company owns the van. The general consensus is that there is a benefit in kind in using the van, which now makes sense. I just had a feeling that the vehicle being a van and not a car made a difference.0 -
It's not really that confusing because if you own a company and you are an employee, you have employed yourself and are therefore self employed. I know the term self employed means sole trader or partnership but its just the way I see it. When I set a client up in business, I tell them they go set up as a limited company or as a sole trader.I don't use the term self employed.0
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Does this lorry driver only have 1 customer? If so, sounds like this client's contract will be inside of IR35, i.e. caught by the intermediaries legislation.Don Juan said:Hi Everyone
I have a client who is a self employed lorry driver through his own limited company. He has gone and bought a van and wants to know what expenses he can claim for in relation to the van. Had he have been a plumber or a painter and decorator (for example), I would have suggested that he can claim for all the costs associated with the van but as he is only using the van to get him from his house to his lorry, I feel that the expenses would be unjustified, especially as he would be putting through all his fuel receipts with most of it relating to personal use. I suspect that the reduction in tax would have been the main driver in the decision to purchase the van.
What are other peoples thoughts on this?
Thanks
Don
Has he had his contract reviewed?
Although, P11D benefits are a deductible expenses before calculating the deemed payment.0 -
Just realised I completely missed that vital bit of information! I read self employed lorry driver. Full stop. @Don Juan you may use whichever term you like to call your clients, but don't expect people to second guess what you mean by them.mrme89 said:He's self employed through a limited company?
Which is it?!
If he's self employed, under the circumstances you descibe he has 100% private and nothing is claimable.
If operating through a company and a van is provided to him by reason of employment, then a van benefit arises. A fuel benefit also seems to arise.0 -
I did state self employed through their own limited company all in the same sentence.0
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I just find it funny how the topic was limited company vans and personal use yet most of the comments have related to the term self employed. Just hope people aren't charging their clients by the hour when giving advice.
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I suppose you are referring to a previous post from a year ago. You either have been stalking my old posts or you have a fantastic memory, meaning your talents are wasted.
I'm an MIP part time as my full time roll is FD for a blue-chip food manufacturer. The simple stuff of knowing if a person can use a van for personal use, is not something I deal with day to day. My time is better spent evaluating multi-million pound investment appraisals, which I do very well.
I read posts on here all the time and think 'how do you not know this?', then I realise that everybody's experience is different. This forum is here for people to ask advice, not to be criticised. I suggest you take note.-1 -
I have not come across a situation before where a client buys a van for the purpose of avoiding taxes. If they have bought a van, its been for a legitimate business reason. I was simply getting a second opinion. I think its disgusting how people on here can be criticising for simply asking for advice. Perhaps I should flag this to the moderators for bullying as I am sure its against the terms of the forum.Bertie said:> @Don Juan said:
> most of the comments have related to the term self employed. Just hope people aren't charging their clients by the hour when giving advice.
Is it not yourself who is seeking simple answers?
The irony -
Future CPD for you me thinks.0 -
Considering you're such a high flyer you've quite thin skin.
Bullying? Really?
As far as I can see; you asked a reasonable noob question, you claim people shouldn't be charging for advice given to clients because you've not received the answer you seek within five seconds of posting the question.
Forgive me but -
1) You worded your question upside down and back to front.
2) The treatment is different whether they be self employed, as your definition, or self employed by the real definition.
3) Choices are, all of the cost and incurr a BIK together with NIC 1A. None of the actual costs and claim mileage, or nothing at all.
4) Sounds like home to work. Is it? Is the lorry stored at the same yard? Temporary workplace?
5) I can't remember reading whether your client works elsewhere or not - further potential issues.1 -
Bertie
Bottom line is that my question was answered after about 2 posts and as far as I was concerned, the discussion was over.
To then be criticised because to somebody else, it was a "noob" question, is unacceptable. I'm an FMAAT and CIMA qualified, and about 6 months from finishing an MBA. 95% of my career has been in industry and I started as an MIP a few years ago to help a few friends out and since then, I have built up a small portfolio of clients.
The question I asked was aimed at getting a second opinion on a situation that I had not come across before. Then people started jumping on the band wagon and bringing up posts from over a year ago which are not even relevant to this topic.-1 -
It isn't unacceptable to label a question as a noob question when it rightly is.
Is it not you who is in receipt of consideration for advice given?
There comes a time where the brand of AAT needs protection. I don't pay my fees for the sake of it - paying in enables me to have an opinion.
Nobody can know the answer to every question, yet having knowledge enables you to know where to look for the answer.
Getting the basics incorrect is not acceptable, you can take from that what you will.1 -
I don't agree with your comment. A lot of people move on from AAT and move into industry. To say that I should be stripped of my qualification because I wanted a second opinion on the tax implications of a situation that I have not come across before is unacceptable.-1
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> @mrme89 said:
> The simplicity of the question wasn't pointed out until you questioned the capability of others
Never mentioned the capabilities of others at all. It all went south when I tried to justify my logic to you on self employed. You posted a stupid video.-1 -
I give up.0
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Most of the people on here are career MIPs and have come across a load of chancer clients over the years and have learned how to deal with those situations.
As a person from industry, these situations never happen and I don't ever recall seeing this situation or a similar one on an AAT exam paper.0 -
I think we all should.Bertie said:I give up.
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> @MarieNoelle said:
> I give up.
>
> I think we all should.
I think the thread should be deleted please Marie. I got my question answered right at the start and everything after that was utter non-sense.0 -
Just out of interest, given this client is a director of his limited company and given that he takes the company van home, can you confirm which answer in the thread you believe to be correct?Don Juan said:> @MarieNoelle said:
> I give up.
>
> I think we all should.
I think the thread should be deleted please Marie. I got my question answered right at the start and everything after that was utter non-sense.
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I could but then I'm thinking that you are questioning my ability as an accountant if you feel that I need to answer that question.0
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Please dont
This is better than the rugby0 -
It's definitely better than watching West Brom!!!1
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I realize that everybody's experience and therefore knowledge is different. I'm simply using this forum to ask for your advice on the answer that helped you the most, not to criticize. I suggest you take note of this. What is the point of the forum if we can't ask for advice? I never questioned your capabilities. I suggest you take note of this too.Don Juan said:I could but then I'm thinking that you are questioning my ability as an accountant if you feel that I need to answer that question.
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I'll write that down.0
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