Capital allowances and stuff

[Jango]

Chris

Your accountant will help on all this, there are two ways of going about it. Like AdamA said it can be done on a mileage basis or the way you are speaking about, personally some of the ideas mentioned are not correct in the above comments. The tax office themselves will talk you through it, and help you. If you get it wrong you will wish you had let the accountant do it. It's money well spent.

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[adamangler]

I think the mileage based way is great.

45p a mile up to 10k

So if you do 10k a year that 4.5k every year to cover you vehicle tax, insurance!,fuel,servicing,repairs etc.

For me roughly

Tax is 220

Insurance 350

Fuel 1000

M.o.t was 100

So that leave 2500-3000 for service/repair/depreciation.

So if you spend very little on the above then you are up 2 grand or so every year

 

[Part Timer]

I think the mileage based way is great.
45p a mile up to 10k

So if you do 10k a year that 4.5k every year to cover you vehicle tax, insurance!,fuel,servicing,repairs etc.

For me roughly

Tax is 220

Insurance 350

Fuel 1000

M.o.t was 100

So that leave 2500-3000 for service/repair/depreciation.

So if you spend very little on the above then you are up 2 grand or so every year

And do you realise you have to keep a mileage chart stating where you went and how far it was to cover yourself on this. HMRC can ask for this and if you haven't kept up to date they can refuse the tax allowance claim.

Mileage Allowance Relief – What records you need to keep | TaxRebates.co.uk

 

[Iurie]

Anyone can advise me please - If I buy a new (used) van can I claim £0.45 per mile annually also to put the van as an asset in the capital allowance this year ? I was told buy a friend of mine that I can either claim per mile every year or claim the cost of the vehicle but not both ....

The cost of the van and running the van - are two different things tho

I also have the receipt for my current van which was bought 4 years ago - but only claimed per mile each year since , it would be great if I could use that receipt as a capital allowance this year

 

[Part Timer]

Anyone can advise me please - If I buy a new (used) van can I claim £0.45 per mile annually also to put the van as an asset in the capital allowance this year ? I was told buy a friend of mine that I can either claim per mile every year or claim the cost of the vehicle but not both ....
The cost of the van and running the van - are two different things tho

I also have the receipt for my current van which was bought 4 years ago - but only claimed per mile each year since , it would be great if I could use that receipt as a capital allowance this year

You can only claim one or the other. If you claim 45p per mile, for the first 10k miles, you can't claim capital expenditure. You also can't change which one you use after a few years. So you either start on the capital expenditure route, best way if you're buying newish vans and changing every few years, or mileage, best route if you buy older vans and run them for 5+ years.

 

[Iurie]

45p per mile - that covers insurance , fuel , mots tax repairs etc - in other words running costs - what about the price you pay for the van itself ? in my case 6k

 

[Part Timer]

The 45p per mile covers depreciation as well, you don't get any other allowance if you go the mileage route

45p per mile - that covers insurance , fuel , mots tax repairs etc - in other words running costs - what about the price you pay for the van itself ? in my case 6k

You either class your Van as your vehicle and claim 45p a mile travel allowance, for the first 10k miles and 25p for all other mileage, or you have it as a works vehicle and claim all costs inc Capital Expenditure which I think you can claim it's total cost in 1 year. However if you do this when you sell it you will be liable for tax.

 

[Tuffers]

You can only claim one or the other. If you claim 45p per mile, for the first 10k miles, you can't claim capital expenditure. You also can't change which one you use after a few years. So you either start on the capital expenditure route, best way if you're buying newish vans and changing every few years, or mileage, best route if you buy older vans and run them for 5+ years.

I bought a brand new van costing me over 16k last autumn. My accountant has said I should offset the cost of the van against tax. Am I right in saying that you're saying I can't claim mileage allowance next year? I've already done 8.5k miles in it from new. I do about 100 miles a day.

 

[Part Timer]

I bought a brand new van costing me over 16k last autumn. My accountant has said I should offset the cost of the van against tax. Am I right in saying that you're saying I can't claim mileage allowance next year? I've already done 8.5k miles in it from new. I do about 100 miles a day.

Unless the rules have changed then your choice is either mileage or capital expenditure. Your Accountant should be the one to ask. And you need to know before the end of the tax year.

 

[Leicester24]

I bought a brand new van costing me over 16k last autumn. My accountant has said I should offset the cost of the van against tax. Am I right in saying that you're saying I can't claim mileage allowance next year? I've already done 8.5k miles in it from new. I do about 100 miles a day.

Tuffers

You can claim for the ACTUAL costs of fuel, insurance, services etc rather than the 45p per mile option

Keep your fuel receipts

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[Part Timer]

TuffersYou can claim for the ACTUAL costs of fuel, insurance, services etc rather than the 45p per mile option

Keep your fuel receipts

Yes, that is what I do. Insurance, servicing, road tax, etc can all be put through. Only problem that might occur is if you use the van for personal use age, I'm sure you don't though.

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[Part Timer]

When you sell the van though, if you've claimed 100% in the first year if you sell it, rather than part exchange it you're liable for 20% tax of the selling price as it's then deemed a profit.

 

[Tuffers]

When you sell the van though, if you've claimed 100% in the first year if you sell it, rather than part exchange it you're liable for 20% tax of the selling price as it's then deemed a profit.

This van's going to the grave with me.

 

[Part Timer]

This van's going to the grave with me.

Then if it is you might be better off going the mileage route. This is where your Accountant should be advising you. Not some bloke working away from home that's been on the drink for 4 hours.

 

[spruce]

When you sell the van though, if you've claimed 100% in the first year if you sell it, rather than part exchange it you're liable for 20% tax of the selling price as it's then deemed a profit.

Even if you part exchange it you are still liable to be taxed on the selling price. When trading in or part exchanging you are still selling the van if I understand you right.

So if you traded your van in for £2000 against a van costing £6000 the Receiver would see it that way rather than the new van costing £4000.

 

[Part Timer]

Even if you part exchange it you are still liable to be taxed on the selling price. When trading in or part exchanging you are still selling the van if I understand you right.
So if you traded your van in for £2000 against a van costing £6000 the Receiver would see it that way rather than the new van costing £4000.

Not sure but I don't think so as all you are doing is using the asset and reinvesting it into another capital asset. I think it just rolls over until you sell it without a replacement. Might be wrong so suggest a call to your Accountant

 

[spruce]

Not sure but I don't think so as all you are doing is using the asset and reinvesting it into another capital asset. I think it just rolls over until you sell it without a replacement. Might be wrong so suggest a call to your Accountant

I'll do that when I next see either of them when doing the windows as its needs to be clarified. I can't see anything relating to trade in on the HMRC website help section.

Its an interesting observation but the way I see it is having been in the trade is that they are buying the van from you. So from your side whatever they give you is a "gain" in Receiver speak.

The way I see it is: The invoice the customer got from us would be for the full price of the 'new' van with VAT shown if that was applicable (VAT qualifying). It was at the end of the invoice where the part exchange allowance was recorded. The dealer then logs the full selling price of the van as the sale and then separately records the traded in van as a new asset at the price paid. The profit he made (selling price less cost price plus remedial expenses) on the van he sold to you is then recorded for tax purposes. The traded in van is shown as a purchase expense and becomes an asset on his books. These are separate entries.

Lets say you paid £6000 for the 'new' van and got £2000 as a trade in for your old van. If you mate casually asks you how much you paid for your new van, do you tell him £4000 or £6000? I believe you would tell him £6000 as that's the price you paid for it. If the insurance company asks you what you paid for it the answer is £6000. If the dealer was asked by the Receiver how much he sold the van to you for he would say £6000.

If you claimed the full price of your new van against tax in that tax year then the "gain" on your traded in van would be 'wiped out' tax wise with your new van's claim in the tax calculation. So in effect you are paying with one hand and taking with the other. So in that sense it is 'rolling over'. But if you decided that the better way for you would be the use the receivers annual write down allowance (WDA) on you new van then you need to deal with the "gain" on the old van you traded in as you can't have it both ways.

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[Part Timer]

I'll do that when I next see either of them when doing the windows as its needs to be clarified. I can't see anything relating to trade in on the HMRC website help section.
Its an interesting observation but the way I see it is having been in the trade is that they are buying the van from you. So from your side whatever they give you is a "gain" in Receiver speak.

The way I see it is: The invoice the customer got from us would be for the full price of the 'new' van with VAT shown if that was applicable (VAT qualifying). It was at the end of the invoice where the part exchange allowance was recorded. The dealer then logs the full selling price of the van as the sale and then separately records the traded in van as a new asset at the price paid. The profit he made (selling price less cost price plus remedial expenses) on the van he sold to you is then recorded for tax purposes. The traded in van is shown as a purchase expense and becomes an asset on his books. These are separate entries.

Lets say you paid £6000 for the 'new' van and got £2000 as a trade in for your old van. If you mate casually asks you how much you paid for your new van, do you tell him £4000 or £6000? I believe you would tell him £6000 as that's the price you paid for it. If the insurance company asks you what you paid for it the answer is £6000. If the dealer was asked by the Receiver how much he sold the van to you for he would say £6000.

If you claimed the full price of your new van against tax in that tax year then the "gain" on your traded in van would be 'wiped out' tax wise with your new van's claim in the tax calculation. So in effect you are paying with one hand and taking with the other. So in that sense it is 'rolling over'. But if you decided that the better way for you would be the use the receivers annual write down allowance (WDA) on you new van then you need to deal with the "gain" on the old van you traded in as you can't have it both ways.

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But if you're then only allowed to claim tax relief on the nett amount, cost less trade in, you're not. making a gain. Far to complicated for me