Business lease, but pay for it from personal acc.

[Moonie]

All,

Has anyone took out a business lease with MB, but paid for it from a personal account? i.e. used their VAT reg'd busness to get the cheaper lease option, but not use it as a company car.

Thanks,

 

[Red C220]

In theory there's nothing wrong with "procuring" an asset using the business and then fully reimbursing the cost yourself (including vat). However:-

The car would have to be registered in the business name to qualify, which also means the car would need to be insured in the business name and paid for by the business. This is expensive as it will be a minimum class 2 business use by default.

You cannot insure a vehicle that is registered to a Limited company on a personal insurance policy. Well, you can't do so without some sort of fraudulent activity.

 

[C60three]

If you have a lease car the finance company is on the V5. LV are happy to insure on this basis without committing fraud

 

[Dryce]

Has anyone took out a business lease with MB, but paid for it from a personal account? i.e. used their VAT reg'd busness to get the cheaper lease option, but not use it as a company car.

Why not find a lease deal that doesn't care if it's a business or personal customer?

Plenty of so called 'business' deals are available to any customer - it's just the deals are quoted as ex-VAT.

 

[regbuser]

I know MB Exeter will sort you out a Personal Operating Lease (POL) showing nett and VAT

 

[Moonie]

Thanks for the replies. The lease i was looking at was around £40/month cheaper as a buisness lease - so for sake of ~£500/year its prob not worth the hassle over the personal lease.

Cheers,

 

[bolide]

You cannot insure a vehicle that is registered to a Limited company on a personal insurance policy

is that a condition set down by insurers? Ownership & registration can be two different people / bodies

Also there is no requirement for a VAT-registered business to be a Limited Company

I would have thought that insurers would be worried more about the insurance being for the correct uses (business, SDP, etc) rather than the disposition of the owner. But I've never researched this

Nick Froome

 

[wemorgan]

OP - yes I've done the above. It seems to be quite common these days as the lease car market expands.

 

[Deleted member 6183]

Thanks for the replies. The lease i was looking at was around £40/month cheaper as a buisness lease - so for sake of ~£500/year its prob not worth the hassle over the personal lease.

Cheers,

Might seem obvious but are you sure that the difference is not just the VAT?

 

[Red C220]

is that a condition set down by insurers? Ownership & registration can be two different people / bodies

Also there is no requirement for a VAT-registered business to be a Limited Company

I would have thought that insurers would be worried more about the insurance being for the correct uses (business, SDP, etc) rather than the disposition of the owner. But I've never researched this

Nick Froome

Yes it's an insurance (legal) position and is more relevant in the cases of Limited companies or other legal business entities (LLP's possibly) VAT registration is wholly irrelevant to this point.

If a Limited company owns or leases or contract hires a vehicle it has to be insured in the Limited companies name (no matter who the registered keeper is i.e. the lease company on the log book).

If you think about it, it's relevant to who the beneficiary of a payment would be in a total loss situation.

A Limited company owns/leases the asset. A private individual can't be in possession of an insurance policy for an asset owned by a Limited company, it creates a conflict of interest.

 

[Red C220]

If you have a lease car the finance company is on the V5. LV are happy to insure on this basis without committing fraud

To do this you would have to state that the owner/hirer of the vehicle was not the Limited Company.

The name on the V5 is technically not the owner, just the registered keeper.

 

[davidjpowell]

To do this you would have to state that the owner/hirer of the vehicle was not the Limited Company.

The name on the V5 is technically not the owner, just the registered keeper.

LV are far more relaxed on ownership than most insurance companies in my experience. They also mirror NCB from company drivers with no hassle. In fact they are a great all round insurance company

 

[Red C220]

We used to run company cars that were contract hired by my Limited Company. This was before it become prohibitively expensive to do so so that last year in which we did this would have been 2011.

These were SAAB's at the time and a Vito. All the SAAB's had the lease company details on the V5 (SAAB UK) and the Vito had my Limited company details (hired directly from MB).

We couldn't insure any of these "off company" despite trying every possible insurer we could. Maybe it's changed in the last 4 years.

It would be interesting to get a confirmation on this from someone in the insurance industry.