The Taxman and the Ineos Grenadier

[Arjan]

What is "commercial RFL" please ?

[Bowie69]

Road fund licence, aka tax. 

[Huw Williams]

The road fund license for commercial vehicles is £320.  This is the only saving from getting the commercial version but it comes with a 10mph speed limit penalty on most roads that aren’t limited to a speed below 40 anyway.

It is disingenuous at best of Ineos to still claim on their website that these are ‘certified as commercial vehicles’ when that is a half truth at best and units to state that for the important part for all VAT registered businesses, that it is NOT a commercial vehicle as far as HMRC are concerned. Customers are currently buying, in good faith, expecting to reclaim the VAT and get some additional tax relief as it is a cost against their businesses. Instead they will be lumbered with 20% more than they bargained for in purchase price and possibly a massive benefit in kind bill for drivers.

It is rather more serious than Ineos make out, certainly for UK dealers, because they can only sell a maximum of 1700 non commercials and commercial sales will be rare once their true status is well known. Currently, in my view, they are in danger of being liable to mis-selling their product by omission of critical facts.

[jeremy996]

21 hours ago, smallfry said:

It grates on me that I have to pay commercial RFL for my three vans. I do not run any sort of business, or use them for work purposes. But its my choice, as the vans are more use to me than a car.

At this base price in the market and with the high CO2 output, van RFL is much less than the car equivalent; that was one of the reasons I bought the N1 Station Wagon. Insurance has been a little bit more of a pain and I need to remember the commercial speed limits, but otherwise the choice is positive. After 5 years and a saving of a few thousand £, I'll have to pay the higher RFL, but I can live with that.

So, you want to buy an M1 (car) Grenadier?

RFL over £40k, £2,605 First Registration

2nd Year £570

3rd Year £570

4th Year £570

5th Year £570

6th Year and onwards £180, assuming the government in power don't change the rules again!

A N1 Van is £320 per year.

Edited May 21, 2023 by jeremy996
More ideas and some real numbers

[Huw Williams]

I’m afraid I’ve gone and cancelled the Grenadier due to the tax situation. I’ve ordered a Ranger Wildtrak which is coming in as a stock order next month with the electric bed cover and tow pack with the 205hp engine. It costs a ridiculous, for a pickup, £42,000 but with the VAT situation has an initial saving of fully £25,000 compared to the ‘commercial [that’s not] Grenadier. There are ongoing savings as well of course, such as offsetting against income tax in my ‘pool’ of depreciating vehicles.

 

I don’t think many people realise the implications of EU regulations on the total Grenadier factory output. Since the commercials do not qualify as such for tax purposes in large swathes of countries, they will struggle to sell these. However the fleet pollution tax concessions the factory gets as a small specialist producer limits the factory to a total of 30,000 vehicles annually. Only 8500 of these are allowed to be ‘cars’ with 21500 sales therefore needing to be commercial vehicles. There is very little chance of them selling more than a fraction of those 21500 vehicles that are speed limited, have no or compromised second row seats and panelled sides for no cost saving to lifestyle rich buyers. What is the proportion of Defender commercial sales? I reckon less than 5% of total sales and yet they actually do qualify for VAT reclaiming . 
 

For perspective, the Ford Ranger sells 60,000 units in Europe alone with 20,000 sold in the UK [which is included in the 60k figure] Worldwide sales of the old model exceeded 300,000 last year and are likely to exceed 400,000 this year with only supply limiting further sales. If I wanted a vehicle not on unsold stock order, including any and all v6 variants, the expected wait to uk delivery is a year or more. Over 90% are VAT qualifying with only the Rapter sports variant not being so due to its sub 1000kg payload.

In conclusion, with the Grenadier pricing situation as it is, the non commercial Defender 110, at around £65k to £70k is a far far better prospect as an all terrain capable car than the Grenadier. The majority of commercial/dual purpose customers will continue to choose pickup trucks.

[Arjan]

Not sure what you mean by "I don’t think many people realise the implications of EU regulations on the total Grenadier factory output" ?

The EU is not deciding in a country if a vehicle is "commercial" or not.

Up to the member states what is or what isn't and how.

But in general, I have found the whole Ineos sales people to be total ....

[jeremy996]

4 hours ago, Arjan said:

But in general, I have found the whole Ineos sales people to be total ....

I've found them to be OK, but only the smart ones are clever enough to say they don't know. Ineos has a problem with getting enough and the right information to the sales agents. The bit about the 5 seat and 2 seat being "commercial" is true, but only to the extent of the DVLA, which is not the relevant bit so far as an business owner/driver is concerned, where HMRC's attitude to Benefit in Kind and VAT status is more important.

My agent have been smart enough to say "we don't know" each time I have pushed for more information than Ineos has released officially, so I have never caught them out.

Ineos are not expecting to sell many Grenadiers in the UK, so the local market taxation conditions have not been at the top of the agenda. When sales slow below the anticipated numbers, I can see their game getting much better. The next big test will be the release of the DoubleCab pickup, it will not meet the Dual Use /Commercial tests as it stands and the exisiting taxation group, so will they replate it as a commercial with an Authorised Mass? The underpinnings will cope with a higher payload, but not within 3.5tonnes gross Vehicle Mass.

 

[Huw Williams]

On 6/11/2023 at 5:44 PM, jeremy996 said:

 

Ineos are not expecting to sell many Grenadiers in the UK, so the local market taxation conditions have not been at the top of the agenda. When sales slow below the anticipated numbers, I can see their game getting much better. The next big test will be the release of the DoubleCab pickup, it will not meet the Dual Use /Commercial tests as it stands and the exisiting taxation group, so will they replate it as a commercial with an Authorised Mass? The underpinnings will cope with a higher payload, but not within 3.5tonnes gross Vehicle Mass.

 

They certainly won’t sell many in the UK but not because they don’t want to but because very few will buy the so-called commercials and there is a limit of 1700 annually of the car versions, the so-called Belstaff models. The factory is constrained to the same proportions out of a total of a maximum of 30,000 vehicles by the EU emissions/taxation laws and the classification of N1 commercials is very similar throughout the EU. Also, as you say, the four door pickup will suffer the same constraints and the UK is the biggest market in Europe for such vehicles, for instance taking 20,000 Ford Rangers annually out of 60,000 total European sales.  Ineos has very modest sales targets which I doubt they will get anywhere near hitting after the current initial flurry of interest subsides and considering that nearly two thirds of factory output potential just must be of commercial vehicles.  I know it is the DVLA or other country’s similar registration classification that matters for this, but it most certainly not what matters to the great majority of potential N1 commercial customers.

[Retroanaconda]

Ineos Automotive are a subsidiary of one of the largest chemical companies in the world, so they don’t have to worry about little things like turning a profit. It’s a very handy tax write off for the  billions in profit they make every year. 

[Happyoldgit]

32 minutes ago, Retroanaconda said:

Ineos Automotive are a subsidiary of one of the largest chemical companies in the world, so they don’t have to worry about little things like turning a profit. It’s a very handy tax write off for the  billions in profit they make every year. 

On a corporate level I would agree with this. However I Huw Williams makes a valid point and potential commercial N1 purchasers in the UK will be pondering what advantages the Grenadier can bring to their business mindful of the lack of tax advantages. Perhaps, in the UK at least, the vehicle will come to be perceived as more of a lifestyle rather than utility brand.

[jeremy996]

1 hour ago, Happyoldgit said:

On a corporate level I would agree with this. However I Huw Williams makes a valid point and potential commercial N1 purchasers in the UK will be pondering what advantages the Grenadier can bring to their business mindful of the lack of tax advantages. Perhaps, in the UK at least, the vehicle will come to be perceived as more of a lifestyle rather than utility brand.

The UK is not perceived as a major target for Ineos; the US, South African and Australian markets are where they are pushing more. 

As for the "Commercial" issue in the UK, there are a few alternatives for Ineos, target the 2 seat utility station wagon, as that could be made as compliant as the new LR90 and LR110, (i.e. only by concession), and alternatively, re-submit it as a commercial vehicle governed by Maximum Authorised Mass. (Plate it to a higher GVW, the chassis and suspension will not care). ( https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/907390/v149x1-rates-of-vehicle-tax.pdf).

Now the second option would exclude anyone without a suitable driving licence, but many people will have it already, C1, C1E etc.

The issue in the US and Australasia is the availability of alternatives, (Jeep, Bronco, older model Land Cruisers etc.), and especially in Australia, the lack of external safety assessment. To get a good score at EuroNCAP, you need autonomous braking, lane assist and similar electronic assistance, none of which are installed or even proposed. Many of the Australian potential purchasers of vehicles for commercial use have a stated policy of 5* NCAP scores, which, so far, has not been tested.

[Happyoldgit]

4 hours ago, jeremy996 said:

The UK is not perceived as a major target for Ineos; the US, South African and Australian markets are where they are pushing more. 

As for the "Commercial" issue in the UK, there are a few alternatives for Ineos, target the 2 seat utility station wagon, as that could be made as compliant as the new LR90 and LR110, (i.e. only by concession), and alternatively, re-submit it as a commercial vehicle governed by Maximum Authorised Mass. (Plate it to a higher GVW, the chassis and suspension will not care). ( https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/907390/v149x1-rates-of-vehicle-tax.pdf).

Now the second option would exclude anyone without a suitable driving licence, but many people will have it already, C1, C1E etc.

The issue in the US and Australasia is the availability of alternatives, (Jeep, Bronco, older model Land Cruisers etc.), and especially in Australia, the lack of external safety assessment. To get a good score at EuroNCAP, you need autonomous braking, lane assist and similar electronic assistance, none of which are installed or even proposed. Many of the Australian potential purchasers of vehicles for commercial use have a stated policy of 5* NCAP scores, which, so far, has not been tested.

All that doesn't provide much comfort for potential UK Commercial N1 customers. I daresay many of those who maybe not fussed about image or looking to also tackle difficult terrain in remote locations on other continents are likely to look for something that makes more sense in terms of tax benefits - for now at least. 

Bit of a poor show IMHO.

[RedLineMike]

7 hours ago, Retroanaconda said:

Ineos Automotive are a subsidiary of one of the largest chemical companies in the world, so they don’t have to worry about little things like turning a profit. It’s a very handy tax write off for the  billions in profit they make every year. 

its FU money at a whole new level

[Huw Williams]

I do feel that I’ve had a lucky escape through cancelling the Grenadier and ordering the Ranger. I have two now, a 2014 and the new one that is a month old and has a thousand miles on the clock. The Wildtrak saved me fully £30,000 compared with the Grenadier so-called commercial and has full time 4wd, superb performance and refinement, far better second row legroom and comfort, superior cargo area with unlimited height, and fuel economy from its 200hp ten. speed automatic that has exceeded 35mpg so far including towing 3.5 tons for 30 miles. Best over more than 100 miles of 42mpg. The driving experience is far superior with electric power steering that is accurate and as good as a car’s and a great driving position and comfort. The infotainment system is also superb. Drawback is that it is a longer vehicle than Grenadier at 129” wheelbase compared to 119, but it still has a better turning circle. It may not perform as well in the most extreme of conditions but it is a known entity to me, having run Rangers since 2007 when I gave up my 22 year old LR 110 Hi-Cap having it worn out and no new model on the horizon from LR.  For the vast majority of new vehicle buyers of business off-road vehicles, including farmers, vets, surveyors, engineers, tree surgeons, builders and utility companies, the modern pickup truck has long taken over from the old Land Rover. The Grenadier will not make significant inroads into these sectors because none of their models, including the Quartermaster pickup, qualifies for business tax reliefs and frankly a fleet buyer can buy three Ranger Wildtrak’s for the price of two Grenadiers and still have change to buy a Dacia Duster outright for lighter duties. That surely puts the Grenadier’s prospects into perspective.

[Maverik]

A good friend just cancelled his order for one too. He took one for a test drive and he did like it, but he struggled with the pedal position with the bulge under his left foot, only after an hour it said it was getting pretty uncomfortable.

He said he got back into his Landcruiser and did a big sigh of relief, he said that pretty much summed up the experience, I think he's probably end up just upgrading the Landcruiser.

If the price tag wasn't quite so steep he mused he could probably look over the various quibbles, but as it stands it doesn't make a huge amount of sense.

[Anderzander]

😢

[jeremy996]

15 hours ago, Maverik said:

A good friend just cancelled his order for one too. He took one for a test drive and he did like it, but he struggled with the pedal position with the bulge under his left foot, only after an hour it said it was getting pretty uncomfortable.

He said he got back into his Landcruiser and did a big sigh of relief, he said that pretty much summed up the experience, I think he's probably end up just upgrading the Landcruiser.

If the price tag wasn't quite so steep he mused he could probably look over the various quibbles, but as it stands it doesn't make a huge amount of sense.

How tall is he? People over 6' seem to have more of an issue with the left foot hump. Setting the driver's seat more upright and higher than normal seems to help. I have no issue with it, but I am only 6' tall.

Although I found an old Defender comfortable enough, I never got on with the Land Cruisers I drove; horses for courses, I guess.

[Lightning]

l had to cancel my Grenadier order because of the above mentioned tax situation.

l loved the vehicle but it was effectively going to cost me over £25,000 more in my books to purchase than a Defender Commercial.

l contacted lneos about the classification but received a corporate reply that said basically it was up to customers what they did with their vehicles in different countries.

Edited September 25, 2023 by Lightning

[jeremy996]

As I implied earlier, I expect Ineos Automotive will sharpen their game when selling the Grenadiers becomes harder! It would not be too hard to get HMRC to accept the 2 seat Station Wagon as a commercial or to replate any model to 4.5T MAM.

[Retroanaconda]

I’d be surprised if they do, UK commercial sales are going to be a very small slice of the pie - especially since they are limited in how many they can sell here. I doubt it would be worth the hassle.

Assuming the things turn out to be reliable, I’m sure they’ll have no bother selling their full production capacity once they get the US leisure buyer market up and running. 

[Escape]

On 9/25/2023 at 10:50 PM, jeremy996 said:

As I implied earlier, I expect Ineos Automotive will sharpen their game when selling the Grenadiers becomes harder! It would not be too hard to get HMRC to accept the 2 seat Station Wagon as a commercial or to replate any model to 4.5T MAM.

Wouldn't a 4.5ton GVW mean it needs a different drivers license? As well as some other limitations in use, including parking etc. It would over here, which is why many heavy vans are plated as 3.5ton instead of 4.5ton (at least that means it's not so bad if they're overloaded).

[jeremy996]

2 hours ago, Escape said:

Wouldn't a 4.5ton GVW mean it needs a different drivers license? As well as some other limitations in use, including parking etc. It would over here, which is why many heavy vans are plated as 3.5ton instead of 4.5ton (at least that means it's not so bad if they're overloaded).

Yes it would, C or C1. In the UK, you would be restricited to the Commercial speed limit, (like my N1 Grenadier is now), but not much else. 

[landroversforever]

14 hours ago, Escape said:

Wouldn't a 4.5ton GVW mean it needs a different drivers license? As well as some other limitations in use, including parking etc. It would over here, which is why many heavy vans are plated as 3.5ton instead of 4.5ton (at least that means it's not so bad if they're overloaded).

Which if being used for business use you're into tacho, driver cpc and driver hours/rests etc unless you fall into the I think small list of exemptions. I think you'd also probably be into operators license and 6 weekly inspections. Plus no one who passed their driving test after 1997 can drive without a test. 

[Lightning]

The Defender Commercial is sold out consistently with a 12-18 month waiting list.

l imagine it's partially due to the VAT and tax advantages plus the much lower BIK

lf lneos can can get the two seat Grenadier classed as Commercial with the HMRC they'll shift loads of them and l predict it would take sales from the Defender.

[Alfaz]

Looks like Ineos now have this confirmed as a Commercial vehicle by HMRC 🥳