Q: I am starting a campervan business and would like to know what percentage of the cost of the campervans I purchase in my first year of trading I can claim against business tax. Does it make a difference if they run on Liquified Petroleum Gas?
Feb 08 2011
Answered by: Clive Lewis Ask a question
The key issue here is how HMRC would classify the expenditure on a campervan. Is it plant and machinery or a car? HMRC defines a car as any 'mechanically propelled road vehicle' except:
• A motor cycle
• A vehicle of a construction primarily suited for the conveyance of goods or burden of any description
• A vehicle of a type not commonly used as a private vehicle and unsuitable as such.
There are two tests for this last category:
• It must be a type not commonly used as a private vehicle
• The vehicle must be unsuitable to be so used.
It will come down to specifics such as the type of campervan used, but HMRC are likely to argue that a campervan is a car for this purpose.
Expenditure on campervans would be added to special rate pool for capital allowances. You would have to keep a record of the 'private use' (if any) - that is use by yourself as proprietor or a director of the company which owned the vehicle. Assuming no private use the vehicle would qualify for 20 per cent writing down allowance.
If the campervan is run on LPG, it is possible that the expenditure would qualify for a First Year Allowance of 100 per cent of the expenditure.
However, this is a specialised field. I suggest that when you have a specific vehicle in mind and can quote the particulars such as cost, etc, you seek more specific advice from a chartered accountant or you check with the HMRC Enquiry Service on 0845 60 55 999. As the tax allowances may vary greatly on whether the vehicle is run on petrol or LPG, its cost and method of finance, it is certainly worth checking the tax treatment in greater detail when more information is to hand. This is best done with an adviser who is aware of your situation and business plans and can ask questions about the specifics of the vehicle.
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