Pick-ups still attract Benefit in Kind (BIK) tax advantages – especially compared to other Light Commercial Vehicles at similar prices.
- If your Isuzu D-Max is for unrestricted private use, your 'benefit in kind' liability is currently £3,000 x your marginal tax rate. So a 20% tax payer will pay £600 per year, whilst a 40% tax payer will pay £1,200 per year
- If fuel is provided by your employer for private use, an additional BIK liability of £550 applies. So the tax payable for a 20% tax payer is £110 per year and £220 per year for a 40% tax payer
- Employees who use an Isuzu D-Max solely for business purposes have no BIK tax liability whatsoever
Sole traders or partnerships are unaffected by the BIK changes to 'Van tax' introduced on 6th April 2007. Tax Allowances fall into three categories:
- Capital Allowances
- VAT Allowances
- Funding Allowances
All businesses qualify for an Annual Investment Allowance giving 100% tax relief on the first £100,000 spent on qualifying expenditure in each tax year. (From April 2012 this relief will be restricted to the first £25,000 of qualifying expenditure in each tax year).
LCVs qualify for a VAT reclaim subject to the business being VAT-registered and the vehicle being purchased outright or on a finance purchase plan.
VAT on hire plan rentals (Leasing or Contract Hire) is fully reclaimable.
VAT may be reclaimed by VAT-registered businesses which purchase a qualifying commercial vehicle, providing the vehicle is used for taxable purposes. For example, if a vehicle is used 50% for business and 50% for private purposes, then only 50% of the VAT paid can be recovered.
Tax information is provided as a guide only. 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 that you discuss this with your own accountant or tax adviser. Details correct at time of writing. Tax liability can vary according to circumstances. Please contact your local HMRC office for further information. Isuzu UK accepts no responsibility for individuals misinterpreting information which is provided as a guide only.