Are lease payments on a van an allowable expense?

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Sparkly
Sparkly Registered Posts: 139 Dedicated contributor 🦉
Sorry If I've put this in the wrong place!

A friend of mine works part time in garden landscaping and maintenance, alongside their normal full time job. They're registered self employed for this purpose. They bought a small, relatively cheap van a few months back but have just had this written off after someone drove in to them. They are currently looking at their options for getting a new van for their part time business. If they were to get a van on a lease agreement, would the payments on this be a deductible expense before calculating their tax?

They have also asked me about claiming business mileage. I believe that they can do this on their part time jobs, but not on travel to and from their full time job (one permanent place), am I correct on this one?

Any thoughts/advice gratefully received!

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  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    Yes, lease payments on a van are deductible. Less any % for private use.

    If they are claiming the lease payments and all running costs including tax, fuel, insurance etc they cannot claim mileage as well.

    If they have another car and occasionally use that for work, they can claim mileage for self employed travel but you are right, not to their permanent place of employed work (but if their job requires them to drive somewhere different, that can be claimed, unless the employer reimburses them at the aprroved rates. If they reimburse at less than aprroved rates, they can claim the difference against tax)
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    Depends;

    Whether the lease period covers the majority of the vehicles useful life or not. If it does, then you treat it as a finance lease and the asset itself as an asset of the business.

    The other option is its a short term lease, more like a vehicle rental and you'll treat the costs as a revenue expense.

    Maybe someone who deals with these on a regular basis can be more specific.
  • Sparkly
    Sparkly Registered Posts: 139 Dedicated contributor 🦉
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    Thanks to you both for your responses on this, I'll pass them on!
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