Claiming expenses for Vehicle(s)

[millerb]

Hi folks, I'm new to the business forum and looking for some much needed advice. I started a Cleaning company in April this year as a sole trader. As yet I do not have an accountant and have been gettting conflicting advice on what I can claim with regards vehicle expenses.The company is not VAT registered.

Let me tell you my situation:

At present I am using my own car for business purposes and realise that I can only claim 40p per mile. I am now looking to trade in my car for a new van.

I am under the impression that if I purchase a van (hp or lease/contract hire) the monthly payments I pay can be classed as a business expense - is this correct. meaning that if for example my payments are £200 per month, this is what I can claim as an expense 100%.
Also, any fuel I use (e.g diesel) can also be claimed 100%.

one other thing, if the van is also used for limited personal use, do i have to proportion the expense (eg 80/20) - meaning if my monthly payments are £200, I could only claim 80% of this?

Apologies if this is a stupid/obvious question but I can't seem to get a concrete answer on this.

Hopefully someone will be able to answer this.

Many thanks,

Millerb.
Is this correct?

[Zeno]

I assume you are a sole trader.

You have been misinformed about HP. You cannot claim the total payments, only the interest and this should be restricted for private use. You mention 80/20 business use so you should only claim 80% of the interest.

This is the same for the running costs, insurance etc.

Now, where this all gets comlicated depends on what kind of agreement you take out but in summary

HP - No tax relief for the payments (Other than the interest) however you get to claim capital allowances on the Van. This will probably mean that the full cost of of the van (less the private use retiction of 20%) will be allowed against tax in the year you by it.

Contract Hire - The cost of the payments is allowed against tax less private use

Lease - Depends if a finance lease or operating lease. If finance then see HP, operating see contract hire.

You are probably unlikely to see a finance lease so far more likely to be HP.

[MyAccountantOnline]

My best advice really now is that you should see an accountant - picking snippets up from a site like this is OK but your at a stage where you need professional advice.

Their are so many issues that a good accountant could look at for you.

All the best.