DISCO4.COM - View topic - D4 Commercial to 7 Seater Conversion

Calcul@tor

Member Since: 08 Mar 2006
Location: Middle England!
Posts: 810

2012 Discovery 4 3.0 SDV6 XS Auto Galway Green

D4 Commercial to 7 Seater Conversion

OK - spoken to my accountant and no reason why I can't run a commercial vehicle. But, I'm far from clear on the practicalities / rules etc - even after reading quite a few posts here.

My understanding is that to be classed as commercial, the vehicle must have been originally sold as commercial. For a D4, Land Rover in the UK take a vehicle off their production line, take it to their special vehicles department, remove the seats (what do they do with them?!) and a few other things, add some window covers and a load deck etc, then supply it to the dealer. The V5 will refer to it as a commercial and state it only has 2 seats.

The (one of the?) basic condition for it to be classified as a commercial is that it must be capable of carrying a 1 tonne load.

I'm not too concerned about the exact specs / changes just yet - I want to get the basics right, before looking at the detail!

So, a few questions:

1 There are various threads about adding different seats. Options seem to be Atlantec / Scotseats / LR originals. For some reason, the Atlantec (and Scotseats?) are treated as still being commercial. Why?

2 If I were to add back LR original seats, (probably the only basis I would go ahead on) would that automatically mean it physically no longer complied with the 'commercial' requirements? Is the answer the same even if all 7 were never used at the same time?

3 People have mentioned insurance being a potential issue. Is it? Does anyone have any experience of insuring a 7 seat commercial D3 or D4?

4 What about at MOT time? Are there any issues then?

5 Are there any rules or requirements for it as a commercial vehicle which are more stringent or costly to comply with than a standard D4?

6 Does anyone have any idea what the resale value of a 7 seat adapted commercial is likely to be, compared to the resale value of a similarly specified 'standard' 7 seater?

Subject to these questions, I may then have some questions on the actual physical changes involved. But that will depend to an extent on the answers to these points first!

Many thanks - any thoughts, advice or pointers would be much appreciated! D4 XS MY12 Galway

15th Aug 2011 7:23 pm

Calcul@tor

Member Since: 08 Mar 2006
Location: Middle England!
Posts: 810

Lots of reads, but no replies.

One offer of advice by PM - many thanks, I'll be in touch.

Can anyone else offer any advice or thoughts on a subject that has potential to benefit quite a few forum members...?

All contributions gratefully received! D4 XS MY12 Galway

16th Aug 2011 9:44 am

kingofthesparks

Member Since: 02 Jun 2011
Location: Near Northampton m1 Watford gap
Posts: 429

2006 Discovery 3 TDV6 HSE Auto Buckingham Blue

WHY ???
Just buy a 7 seater

16th Aug 2011 3:05 pm

hensoni

Member Since: 01 Oct 2007
Location: Sleepy Somerset
Posts: 576

I spoke with a specialist at my local HMRC office a while back when debating whether to get a van, a dual purpose vehicle (pick-up), a D3 Commercial or a VAT qualifying 'standard' D3 and getting it converted by someone like Nene Overland.

Vans, DPVs and 'pure' D3 Commercials are treated as commercial vehicles off the production line so are registered as such on the v5 - which means that you pay commercial rates of VED and don't have to submit a P46 (car) for BIK purposes. If you are VAT registered, you also maintain the VAT Qualifying status of the vehicle.

The commercial quality of the vehicle is based (paraphrasing) "on it's ability to carry a commercial load, rather than passengers." I've also got a VW T5 and it's easier to use that as an example. My T5 "off the line" was a panel van with 3 seats up front. It has a cargo carrying capacity of 1.1 tonnes (give or take). I have fitted additional windows and a row of seats to make it into a crew van (which incidentally, is a sod to insure...). The additional weight of the glass, the seats and the seat mountings come off my cargo capacity. In my case, I get close to the 1 tonne limit. If it went to a weighbridge, I might even have less tonnage capacity but as the seats are removable and I could take out the ply lining (which also counts), I reckon I could still get above the magic 1 tonne capacity. If I had fitted more seats and windows, additional panelling, air con system, rear entertainment, etc and turned it into a virtual Caravelle, I would go below the 1 tonne limit AND turn it's principal role into a vehicle for carrying passengers. At that point in time, it would become "a car" and require all the things that a company car needs.

Back to your situation...

If you bought a 'car' and got Nene to convert it (Â£1800 plus VAT in round numbers), you would continue to pay 'car' VED rates. If it were a VAT qualifying vehicle (e.g. brand new or an ex-demo), you would maintain the VAT qual status. HMRC told me that they would expect the bulkhead to be welded in place and the ply lining to be "firmly fixed." Nene reckoned that the bulkhead could be left loose and the ply-lining readily reconfigurable to suit the seating required.

So, if you buy a brand-new Commercial, removed the plastic window linings, replaced the seatbelt mountings, added carpet, stereo, etc and removed the bulkhead, would HMRC still consider it to be a vehicle primarily aimed at the carriage of cargo?

The difference between vehicle gross weight and kerbweight for a HSE D3/D4 is approx 650kg, so well under the magic 1t number. The LR website doesn't mention the load carrying capacity of the Commercial, but it must be close to the limit. You then have to add the mass of "fixed" items such seating, plastics, looming, etc to the kerb weight - which is why many seats are sold as "temporary."

Warranty wise? Goodness only knows

In terms of MoT, the regulations regarding seating are due to change soon if they haven't already. Previously, the testing of seats and seatbelts was based on the seating identified on the V5, rather than the actual seats fitted. Europe has woken up to the common habit of bolting seats to a floor (or welding!) and then people thinking that it's safe...

In terms of value, I suspect that you would have to keep the vehicle until it fell apart. The number of people that would be interested in such a vehicle is very few. Joe Public would have no interest and you only have to look at how nervous LR are with 'bespoke' vehicles such as Kahn and Overfinch to realise that they wouldn't even touch it in a part ex. If you returned the vehicle to it's native commercial state, it would be saleable, but as a hybrid?

BTW, Nene will also buy a brand-new LR direct from the factory and convert it for you. The V5 still shows a "car" so you still pay full VED but they provide it with a conversion certificate which apparently LR will still honour under warranty. AFAIK, you are shown on the V5 as the first owner. When it's time to move to a D4, I suspect this is the route that I will follow. 4 years down the line, the vehicle gets reverted to it's proper 7 seat status and sold on as a 'car.' Club missing my D3

16th Aug 2011 3:20 pm

Calcul@tor

Member Since: 08 Mar 2006
Location: Middle England!
Posts: 810

kingofthesparks wrote:
WHY ???
Just buy a 7 seater

Because there are potentially very significant cost savings...

But, having read hensoni's post below... significant issues too. D4 XS MY12 Galway

16th Aug 2011 4:02 pm

kingofthesparks

Member Since: 02 Jun 2011
Location: Near Northampton m1 Watford gap
Posts: 429

Maybe big savings , but don;t expect big resale vales , if that was the case everyone would be doing it.

16th Aug 2011 4:09 pm

hensoni

Member Since: 01 Oct 2007
Location: Sleepy Somerset
Posts: 576

Quote:
if that was the case everyone would be doing it

Not quite. It isn't financially viable for the vast majority of people. If one is a director of a one's own limited company, VAT registered and in charge of one's own financial destiny (as much as we can be), then there are very tax efficient savings to be made.

For instance, I use my (personal) D3 for my business purposes (i.e. I own, control and run the business) and drive about 12k a year on business towing a heavy trailer. For the first 10k miles, I claim 40p a mile. For any mile after that, I claim 25p per mile - so Â£4500 expenses claims per annum. It costs me, as an individual, approximately Â£0.75 a mile due to the additional servicing costs, increased fuel burn, increased tyre costs, etc associated with towing - so I'm Â£4.5k out of pocket. As an employee, to achieve Â£4.5k 'cash in pocket', I would need to earn approx Â£7k a year in salary which I also need to pay both lots of National Insurance on so I'm paying 13% extra again. And then there's the VAT. I claim a proportionate amount of VAT back on the fuel based on the percentage of business miles versus total miles but I can't claim the servicing costs, the MoT, the VED, or the VAT on those products or anything else back because that is covered in the 40p per mile claim. If I shred a tyre on company business, tough. It's covered in the 40p per mile.

If the vehicle were a commercial, then every penny goes through the company books, there is no PAYE, NIC or VAT to worry about. Of course, the vehicle does actually have to be used for business purposes with only "incidental mileage for personal use" otherwise there is a Benefit In Kind payment due.

You may well consider this a sob story - it isn't. As it happens, it is my customer (which happens to be the tax payer for most of my work) that has to pay a premium which of course adds to the taxman's coffers in the form of VAT. That VAT then pays for civil servants who spend more money with small businesses (a couple of whom are sponsors on here), generating even VAT and so it all goes around. If the tax laws were more efficient, we would all be better off.

Club missing my D3

16th Aug 2011 5:46 pm

Calcul@tor

Member Since: 08 Mar 2006
Location: Middle England!
Posts: 810

Thanks hensoni for both your extensive and informed posts.

My position is that I own a business with 2 other partners, so not a limited company / BIK - but potentially significant VAT savings on the purchase price and various other savings. There are obviously some disadvantages as well - particularly if looking to convert it back into a 7 seater - which ideally is what I am / was hoping to do.

I'm only at very early stages, but, I must admit I'm beginning to think maybe this isn't the right option for me! D4 XS MY12 Galway

16th Aug 2011 10:17 pm

Baschurchbill

Member Since: 22 Jun 2011
Location: North Wales / Shropshire
Posts: 54

2011 Discovery 4 3.0 SDV6 Commercial Auto Fuji White

Here is my penny worth!
I have had two Mercedes Vito dual liners since 2004 and bought my D4 commercial in June.
My first Vito was supplied with two rows of seats (6 in total), windows all round & was classed as a dual purpose commercial because it carried 1 tonne & weighed less than 3 tonnes laden. This allowed me to reclaim the vat, pay Â£210 RFL & drive at 60mph on single carriage ways.
My second was a Vito Sport X with 3ltr V6 diesel, two rows of full leather seats (5 in total) windows all round. Same tax and vat position.
Dicovery D4 bought in June had two seats, does not declare a load of 1 tonne but has reclaimable vat and rfl at Â£210. Also very importantly due to its weight would normally restrict my legal speed to 50mph on single carriagways, but as it is dual purpose due to 4x4 it again is legal at the car speed of 60mph.
Now for windows! I have found no reason for the windows to remail blanked with plastic. Privacy glass is considered opauqe if opauqe was required & windows now reconnected.
I have researched the fact that companies are able to fit a second row of seats without compromising the vat and commercial status of the vehicle & discovered that if a rear seat is fitted that occupies less than 45% of the load floor space the commercial status is intact.
In view of that I have purchased the second row seat from LR (in kit form) along with the seat belts etc.
Running a busy MOT station I can see no problem whenn it is due for MOT providing everthing is working.

17th Aug 2011 6:19 am

Calcul@tor

Member Since: 08 Mar 2006
Location: Middle England!
Posts: 810

More useful thoughts - thanks.

You mention obtaining the second row seats 'in kit form' from LR. Do you mean you just bought the parts needed as parts - or is there some sort of kit? Can you give an indication of cost? And if so, whether leather or cloth?

Many thanks D4 XS MY12 Galway

17th Aug 2011 11:09 am

Baschurchbill

Member Since: 22 Jun 2011
Location: North Wales / Shropshire
Posts: 54

Unfortunately there was no kit so all the parts had to be ordered individually. The dealer missed some significant parts so I am expecting the total to come towards Â£2K in cloth trim to match my front seats. Not built the seat yet as one part of the frame is on back order.

17th Aug 2011 11:16 am

DG
Site Moderator

Member Since: 12 Dec 2005
Location: The Gaff
Posts: 50934

Why don't people just pay their dues instead of trying to wangle the system ...no different to benefit fraudsters IMO

21 year LR veteran > D2 GS 2003 > D3 S 2006 > D3 HSE 2009 > D4 HSE 2013 > D4 HSE 2015 > D5 HSE 2018 > DS HSE R-Dynamic P300e 2021

17th Aug 2011 12:55 pm

Baschurchbill

Member Since: 22 Jun 2011
Location: North Wales / Shropshire
Posts: 54

Steady on! No one has broken any rules. I have paid my dues and I am entitled to work WITHIN the rules laid down by others to my best advantage so dont compare me with fraudsters!!!!

17th Aug 2011 1:05 pm

DG
Site Moderator

Member Since: 12 Dec 2005
Location: The Gaff
Posts: 50934

I am entitled to an opinion and I didn't mention you or others specifically

.....if you and others have worked within interpretation of the rules then that is obviously fine ......but I do take an impression that there are those who want to convert their commercials back to a 'normal' car with the intention of trying to get away with it and that really gets up my nose

21 year LR veteran > D2 GS 2003 > D3 S 2006 > D3 HSE 2009 > D4 HSE 2013 > D4 HSE 2015 > D5 HSE 2018 > DS HSE R-Dynamic P300e 2021

17th Aug 2011 1:20 pm

Calcul@tor

Member Since: 08 Mar 2006
Location: Middle England!
Posts: 810

There is a difference between tax evasion and tax avoidance...

One is legal, the other isn't! I'm all for the former and and don't know (m)any people who knowingly pay more tax than they need to.

Actually, my main reason for looking at the options here isn't actually tax avoidance, but affordability / justification of expenditure. Even without tax savings (if any), the D4 commercial potentially offers a cost effective route to buy a new D4 - especially if 'cheap' row 2 & 3 seats can be acquired. It also qualifies for an NFU discount, which the base GS no longer seems to.

If I bought a commercial, I would like to turn it back into basically a 'car' - but would only go down that route AND claim tax reliefs etc if it is fully within the rules. Under no circumstances would I break them, although if they can be legitimately bent, I'm keen to examine the options.

Even without claiming any tax allowances, there is mileage in looking at buying and converting a commercial, purely because of the way the pricing seems to stack up - provided the extra seats can be sourced cheaply.

(edited to add last two paragraphs after reading DG's second post above) D4 XS MY12 Galway

Last edited by Calcul@tor on 17th Aug 2011 1:35 pm. Edited 3 times in total

17th Aug 2011 1:27 pm