Help please! Vans in a sole trader business

jayp

A friend of mine runs a small cleaning company and does her own online return as a self employed sole trader. She doesn't keep full accounts - just enters her income and expenditure on the HMRC forms. She happened to mention that she bought a van last year and put the full cost as expenditure on her tax return for 08/09. My first thought was that this was seriously wrong but on reading through help sheet 222 on HMRC's webpage it would appear that this could by classed as the annual investment allowance, so could be all tax deductable. Any advice from AAT's with experiance in tax would be greatly appreciated.

JodieR

Yes, you can now deduct 100% of the cost of any plant and machinery up to the value of £50k in the year it was purchased under the annual investment allowance. This doesn't apply to cars but commercial vehicles do qualify.

Lina

Van is definatelly clasifies as annual investment allowance, so if she bought a van in 08/09, full cost (if bellow £50,000) goes to annual investmetn allowance column on the tax return.

Monsoon

Yes.
Technically she should have put it in the AIA box and not in general expenses, though the net tax result should be the same.

jayp

Thanks to all:001_smile: