Buying a van - sole trader

[ShellaBella]

Hi All

Would anyone be able to point me in the right direction of where I can find out a definite answer as to how much buying a van would go down as expenses please.

I have looked online including HMRC and cannot seem to get a straight forward answer - I have read the following;

You can claim the cost of the van in FULL
You can claim 20% of the cost of the van
You can claim back the VAT if you are a registered company - (we are not so this makes no difference)
You can claim for both the cost of the van and mileage allowance - this would be amazing but seems too good to be true!

We are changing accountants for this year and when we asked if he would take us on as clients we were told yes but could we get back in touch in April - unfortunately this will be after the 22/23 tax year ends and we want to know if buying a van would be a good way of getting our 22/23 tax bill down whilst benefitting the business.

Thanks for any pointers

 

[DWS]

I take it you are a sole trader or partnership and not a Company?

You can claim the whole cost of the van minus any private use along with actual running costs or you can claim mileage you can not claim both.

 

[ShellaBella]

I take it you are a sole trader or partnership and not a Company?

You can claim the whole cost of the van minus any private use along with actual running costs or you can claim mileage you can not claim both.

Hi

Yes, sole trader at the moment.

That's great news - thank you! There wouldn't really be any personal use as we have a family car we use but its good to know the whole cost can be used.

If we paid a lump sum and then remainder on monthly payments for the same van would that go across the 2 tax years or would it just be the year we received the van? ie if we paid £10,000 in this years tax return and received the van and then 12 months of say £250 per month for the remainder would the 12 monthly payments be able to go on next years tax as an expense or can it only go on one tax return as it would be for the same van?

I hope this makes sense
Thanks again

 

[DWS]

It would depend on which accounting method you use, cash basis or accrual, I would imagine because you have been using accountants it would be accrual accounting.

If using cash basis then it is accounted for whenever the payments leave your bank, if accrual then you would use Capital Allowances and this would depend on what type of finance agreement you enter into, different types of finance are treated differently for the accounts.