Buying a van and putting the company name on log book

[Calibre Designs]

So if there was an option to buy a van outright or pay per month on finance, what would have the best tax benefit? I can't finance the van under my own ownership and charge my company for the use so I'm using the company money to buy it. I will buy it outright I think.

If it makes any difference, some points to consider:

- the van will only be used for business, nothing else.
- fuel to be claimed as an expense - full amount.
- the company is a Ltd co and VAT registered.
- any difference if there is 3-5 vans then to just have the 1 van?
- logbook to be in the company name or the directors name? Any difference?

Thanks in advance

 

[David Griffiths]

Depends on numbers and there isn't enough information given. It should probably be in the company name, as that will enable it to recover the VAT (if you pay any) and as there's no private use there is no personal tax issue.

As to the method of purchase the tax relief depends on the exact method, but over the life of the vehicle you will get tax relief on what it costs you. There is more than one way of buying with finance on monthly payments and the tax treatment is different. Again, not enough information

Whether it's lease, hire purchase, lease purchase or finance lease the bottom line is that they are just different ways of borrowing money. Add up the total that you pay, ignoring the VAT, and that's the cost. That's what you get tax relief on, but the way that you get it depends on the agreement