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TAX AND COMMERCIAL VEHICLES
All L200 models, as well as the Shogun SWB 4Work and the Outlander 4Work, are classed as light commercial vehicles (LCV). Driving a Mitsubishi LCV could now save you up to £1,614 on Benefit in Kind tax payments compared with an equivalently priced passenger vehicle.
- If you enjoy unrestricted private use of a Mitsubishi LCV, from April 2008 your BIK liability is £3000 x your marginal tax rate, ie, a 20% tax payer will pay £600 whilst a 40% tax payer will pay £1,200.
- If your employer provides your fuel for private use an additional BIK liability of £500 applies, which means the tax payable for a 20% tax payer is £100 and £200 for a 40% tax payer.
- Employees who use a commercial vehicle which is only available for business purposes, including home to work travel, have no tax liability.
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This table compares the tax payable on a pick-up and equivalent vehicles with a similar retail price, showing a BIK and fuel benefit tax saving of up to £,780!
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Mitsubishi L200
Warrior D/C Manual
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Ford Mondeo 2.0 TDCi
Ghia Est Manual
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Jeep Cherokee 2.8
CRD Sport
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| Emissions
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£LCV
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£156g/km
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£246g/km
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| VED Cost
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£180
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£145
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£400
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% of cars price to be taxed
(inc diesel supp.)
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n/a
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22%
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35%
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| BIK Liability
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£3,000
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£4,708
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£7,035
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| OTR Price
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£20,029 |
£21,400
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£20,100
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| OTR less VED
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£20,029 |
£21,255
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£19,700
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Fuel benefit in kind †
(inc. private use)
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£500 |
£3,718*
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£5,915*
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| 20% tax band
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| Vehicle tax @ 20%
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£600
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£942
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£1,407
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| Fuel benefit tax @ 20%
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£100
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£744
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£1,183
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| Total tax payable for a 20% tax payer
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£700
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£1,685
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£2,590
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| 40% tax band
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| Vehicle tax @ 40%
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£1,200
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£1,883
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£2,814
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| Fuel benefit tax @ 40%
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£200
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£1,487
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£2,366
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| Total tax payable for a 40% tax payer
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£1,400
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£3,370
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£5,180
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* Business milage may be reclaimable at up to HMRC approved rates
† Based on 22% charge for Ford (19% plus 3% diesel surcharge) and 35% charge for Jeep
(27% plus 3% diesel surcharge) of £16,900 fuel BIK fixed figure. Fixed figures to increase by RPI each year.
All LCVs pay the same level of car tax (Vehicle Excise Duty), ie, £180 per annum.
There is no specific tax on 4x4 or 4x4 commercial vehicles.
Sole traders and partnerships can also enjoy tax allowances when purchasing LCVs:
VAT ALLOWANCES
- LCVs qualify for a VAT reclaim** subject to the business being VAT registered, the vehicle being used for business purposes and it being purchased outright or on a finance purchase plan.
- VAT on hire purchase plan rentals (contract hire or leasing) is also fully reclaimable, subject to the points made above.
**The percentage of VAT reclaimable is dependent upon the extent to which the vehicle is to be used for business purposes, ie, if the vehicle is used 50% for business purposes and 50% for private purposes then only 50% of the VAT can be recovered. The same ruling applies to fuel purchases.
NB Tax liability can vary according to circumstances and we suggest that you check with your accountant or tax advisor to see what allowances you are eligible to take advantage of.
DISCLAIMER
The tax allowances detailed are subject to timing differences and the status of your business. You should check with your Accountant or Tax Adviser that you are eligible to take advantage of these allowances. Personal use of these vehicles may give rise to a tax assessment and we recommend you discuss this with your Accountant or Tax Adviser. Details correct at time of publication. Tax information is provided as a guide only. Tax liability can vary according to circumstances. Please contact your local Inland Revenue office for further information.
You can contact The Inland Revenue Contact Centre on 0845 300 3939 or visit their web site at www.inlandrevenue.gov.uk.
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