Could someone cast their eye over this for me please - Vans

Sarah-Lou

Somebody (not a client) asked me some advice on a van purchase they are hoping to make. Apart from when taking AAT have not dealt with vans before be very grateful if someone could confirm what I have written below as correct (or not!)

12/13
If van purchased in this tax year AIA of £25000 is available (if van purchased outright).

If van purchased on a lease agreement - cost of lease deductable on a monthly basis as paid to leasing company but no capital allowances as technically the van doesn't belong to her

If purchased on a finance agreement (hire purchase) capital allowances can be claimed on the original purchase price of the van and the finance cost of the van deducted monthly as paid (not sure about this bit)

As 100% business (she has another vehicle for personal) she can put through all expenses (insurance, servicing, fuel) OR claim 45p a mile. Is the van still capitalised if claiming the mileage allowance?

Benefits of buying this year v next financial year

Couldn't really see any - am I missing something? Am currently at work so don't have access to my text books and HMRC not really being that helpful.

Thank you

Sarah-Lou

groundy

Sarah-Lou wrote: »

12/13

If van purchased in this tax year AIA of £25000 is available (if van purchased outright).

YES

If van purchased on a lease agreement - cost of lease deductable on a monthly basis as paid to leasing company but no capital allowances as technically the van doesn't belong to her

YES

If purchased on a finance agreement (hire purchase) capital allowances can be claimed on the original purchase price of the van and the finance cost of the van deducted monthly as paid (not sure about this bit)

AIA can be claimed on cost of van, but finance repayments would be used to pay off finance debt on balance sheet, with interest charged to P&L

As 100% business (she has another vehicle for personal) she can put through all expenses (insurance, servicing, fuel) OR claim 45p a mile. Is the van still capitalised if claiming the mileage allowance?

If you are claiming mileage then you do not capitalise the van. The 45p is only for first 10,000 then 25p. In most cases with vans we would use the actual cost as opposed mileage (espcially with a cost price of £25k). You must be aware of tax implications on sale of van if claiming AIA on purchase

Benefits of buying this year v next financial year

If they need the vehicle soon, they would be better to but pre 5 April as opposed to buying on 15 April for example. By delaying 10 days to purchase they will have to wait 12 months to obtain tax relief. However, we never advise buying vans that arent needed simply as a way of saving tax


Couldn't really see any - am I missing something? Am currently at work so don't have access to my text books and

Hope this helps :001_smile:

Sarah-Lou

Thank you that is fantastic! She does actually need a van for her business so she just wanted to know the best way to do it.

Looked on the HMRC website for ages!

stevo5678

QUOTE FROM OP

"As 100% business (she has another vehicle for personal) she can put through all expenses (insurance, servicing, fuel) OR claim 45p a mile. Is the van still capitalised if claiming the mileage allowance?"

STEVO

Yes if a second vehicle is used you can claim 45p a mile. This is completely separate to the van.


OR

Include in the business and do a private pro-portion.