Purchasing a vehicle with an ABN

[naddis01]

We are looking at buying a new ute. Some of the dealers have asked if we have an ABN. My wife has an ABN and runs a graphic design business from home which has made a small profit. She is not registered for GST. Are we able to purchase a vehicle using her ABN in order to get a better deal? We would not be looking to claim any tax benefits from it. What other implications would there be? Like insurance, rego etc. Can you use the ABN to get a better deal but still have private rego?

Thanks in advance.

[Crazy Dazz]

Ok, as far as you are concerned there is no legal or statutory relevance between having an ABN and buying the car.
(If your business is registered for GST, and your business buys a car you obviously claim back the Input Tax Credit (GST paid) but as you said that doesn't apply.)

So in reality it is simply a question of what the dealer is offering.
Some "ABN holders ONly" deals are worth less than a free sausage sizzle, you can equal or better it simply by haggling.
HOWEVER, in some instances, it may actually be a Manufacturer (eg Ford, Toyota, etc) sponsored discount, in which case the dealer is genuinely able to sell it to you cheaper.

But again, there are no hard legal rules to this. We always bought (new) cars with a National Fleet Discount, on the basis of a letter from Dad's work.
So it depends on the "rules" imposed by the Manufacturer and how rigidly they are imposed by the dealer.
It could be worth nothing,
or it could be as simple as: "plug ABN in here = $X,xxx dscount,"
or they may impose rules.

I have an ABN because I'm an Accountant and occasionally work on a contract basis. With that ABN I qualify for a "trade" card at Masters and get 10% off normal retail. Possibly NOT what they originally intended, but not tightly policed.

So you can offer them the ABN and see what it gets you.

As a general rule, "Private Rego" is simply a matter of declaration, and that is between you and the government, not the dealer or manufacturer.
So even if the dealer INSISTS on a business rego, you go to the transport department the next day, inform them of the mistake, and get a nice refund.

[Itsme]

I bought my last vehicle with ABN number supplied for discount which has private rego, I'm surprised the dealers have not explained how it can work for you.

[cheap]

Also dealers should check that a company is legit on the ASIC website prior to the sale and registration of new vehicle.

[PepeLePew]

I bought my ute with a largely irrelevant ABN when we got the point of no further discount at dealer level, only squeezed an extra $500 though. Hardly worth the fuss.

[tranquilized]

Why don't you buy the ute through your wife's business and claim everything you can? You'll get the GST back for starters (after you register the business for GST which takes 5 minutes) and it's really the only way to buy a new car imo.

[Tassie f100]

A lot of small businesses have ABN numbers but don't register for GST because they can't be bothered spending time doing GST reporting for the sake of a few dollars.But if it is a work vehicle she could register and claim the GST back this year then deregister next year.Also if the vehicle either new or secondhand is a business vehicle you can claim up to $20000 as a tax deduction if your business makes enough to pay tax.(Which most small businesses don't do)

[Craig@AUDI]

Really depends on the ute your chasing...Falcon ABN pricing is pretty small, Rangers get a pretty good one.

[naddis01]

Her business (Graphic design from home in her spare time) is only very small and the paperwork is not worth the trouble to register for GST.

The vehicle would not be a work vehicle.

I am chasing a Ranger or BT50 or maybe even a Navara. 4x4 dual cabs.

[Crazy Dazz]

Originally Posted by tranquilized

Why don't you buy the ute through your wife's business and claim everything you can?

Which in their case is NOTHING.

Originally Posted by tranquilized

You'll get the GST back for starters

No, they wouldn't.

[tranquilized]

Originally Posted by Crazy Dazz

Which in their case is NOTHING.
No, they wouldn't.

Alright mate you're the accountant after all, well done

[Dr Smith]

Originally Posted by Crazy Dazz

Which in their case is NOTHING.
No, they wouldn't.

If they do take out GST registration and lodge BAS returns why couldn't they claim back the full GST component of the vehicle in the same period of purchase?

[b2tf]

Originally Posted by naddis01

Her business (Graphic design from home in her spare time) is only very small and the paperwork is not worth the trouble to register for GST.

The vehicle would not be a work vehicle.

I am chasing a Ranger or BT50 or maybe even a Navara. 4x4 dual cabs.

Similar situation as me but I can actually justify it a bit more as an "actual" work vehicle. I did not end up using the ABN as it wasn't going to make that much difference to overall discount vs amount of work involved.

Still, never hurts to use it as a bargaining tool and see how you go.

[RANGEREST]

Originally Posted by Dr Smith

If they do take out GST registration and lodge BAS returns why couldn't they claim back the full GST component of the vehicle in the same period of purchase?

Crazy Dazz, fill us in here, (I'm no accountant)
Assuming that they registered for GST for a year,
wouldn't this potentially be a 4-5 thousand dollar saving?
Which would be worth the small amount of paperwork.

[buggerlugs]

When I have bought vehicles thru our business I don't expect to get a discount because I have an ABN. But I do get the GST back off the vehicle as a Tax credit. Nothing more, nothing less.............

[xtremerus]

And GST is payable when you re-sell it or trade it.
Admittedly the value is less after say, 4 years, but you don't get to keep the whole GST deduction over time.

[Crazy Dazz]

Originally Posted by velvet

Crazy Dazz, fill us in here, (I'm no accountant)
Assuming that they registered for GST for a year,
wouldn't this potentially be a 4-5 thousand dollar saving?
Which would be worth the small amount of paperwork.

To put it very simply, GST, works on the same basis as "normal" accounting for tax purposes.
Just because I (sometimes) run a business and am registered for GST (I am)
doesn't mean I can claim "everything" as a tax deduction. To claim the costs associated with a car, it must be directly related to my business (so if I was a tradie carrying gear around to work sites, fine, but not in my case nor the OP.)
Same with income. If my brother gives me money, or I win lotto, or sell a car, I don't pay tax on that because its not income. When I get paid for working, even through my business, I pay tax.

So GST applies in much the same manner. When I derive income through the business, I have to charge GST (and give that to the government.)
The same legitimate expenses that I can claim for my business (not much, some phone, computer, software, etc) I can also claim back the GST as "Input Tax Credits."

Obviously, if you use your car in your business, then you can claim the costs and GST, but the OP clearly said that wasn't the case for them.
I guess the ultimate point being that simply registering for GST doesn't automatically bestow claim-ability on everything you buy.

[tranquilized]

Originally Posted by Crazy Dazz

To put it very simply, GST, works on the same basis as "normal" accounting for tax purposes.
Just because I (sometimes) run a business and am registered for GST (I am)
doesn't mean I can claim "everything" as a tax deduction. To claim the costs associated with a car, it must be directly related to my business (so if I was a tradie carrying gear around to work sites, fine, but not in my case nor the OP.)
Same with income. If my brother gives me money, or I win lotto, or sell a car, I don't pay tax on that because its not income. When I get paid for working, even through my business, I pay tax.

So GST applies in much the same manner. When I derive income through the business, I have to charge GST (and give that to the government.)
The same legitimate expenses that I can claim for my business (not much, some phone, computer, software, etc) I can also claim back the GST as "Input Tax Credits."

Obviously, if you use your car in your business, then you can claim the costs and GST, but the OP clearly said that wasn't the case for them.
I guess the ultimate point being that simply registering for GST doesn't automatically bestow claim-ability on everything you buy.

OK so you've stated a few pretty obvious points here. If you run a graphic design business you can't go claim the GST on your food, or new washing machine, or whatever. Office supplies, computer software, printing - sure.

But you seem to be attacking this from the moral high ground. Your clients must be paying a lot of tax...

What business can't get away with claiming a car? Apart from one not declaring enough income to claim the expenses against of course, which may be the OP's case. The whole automotive sales and finance system is geared towards businesses leasing new cars and flipping them at the end of the term for another one. Been going on for ever and it ain't stopping any time soon. Does the business actually need the car to turn a profit? Often yes, but very often no.

Your posts suggest it simply cannot be done, when in actual fact it is done time and time again by squillions of businesses every day.

[Crazy Dazz]

[GasoLane]

Seeing as the OP was merely asking if he could get a better deal from the car dealer and would not be claiming any Tax benefits, the GST does not come into it.

I think the question has been answered.....closed