Advise on new van against tax ?

[Pjj]

When I first started, I booked an appointment with our local DWP office in Middlesbrough. The lady I had the appointment with explained what I could claim for as a legitimate business expense and what was not a legitimate business expense.

She also explained that a certain amount of vehicle expenses would be private and most would be business. It was up to each person to decide what the percentage difference would be according to their business. She did say that if we were working and decided to stop and go to the chippy for takeaways, that would be private use of the van.

We claim 100% expenses for the vans as they are used for business only , we do get lunch every day using the van but it’s always going between jobs and we would be on that same road anyway. I don’t think that would stand up in any court I had this discussion with my accountant years ago he said it’s reasonable to use a vehicle for any purpose that helps your business you can’t work without food so getting lunch is fine , also going to buy or collect anything to do with the business is acceptable ,if however you went out for a meal in the evening solely non work related things then yes that’s social/ domestic use , but I don’t want to be going out socially to the pub with friend in a sign written van anyway

 

[Iron Giant]

Unless of course if you tried selling your services to the chip shop , then it might be marketing activity.

I could tell them I am driving down Yorkshire to look at the viability of building a round in Yorkshire Dales as I'm considering relocating

 

[Crystalalan]

I did once nip to the local Chinese in the van as I couldn't be bothered unlocking gates to get car out. While I was in there they asked for a quote to clean their windows , which I now do. Unfortunately their bill doesn't cover my bill but as they say 'every little helps'.

aww you rebel

 

[dazmond]

Technically yes, although you can, I believe use the per mile rate. i.e. reduce the expenses by a fixed rate per mile that hmrc set. You can also use the standard rate for using a room at home when you do your accounts, admin etc. I think it's about £10 a month. A good accountant can save you more than their fees by knowing the rules.

I keep it simple and put all expenses in regards to the van through every tax year. Cash basis accounting is really easy esp if your a sole trader working on your own in the 20% tax bracket(using cleaner planner)so HMRC only get my total turnover and whole,yearly expenses.

The only way they would know every single expense would be if I got an investigation.

 

[ched999uk]

aww you rebel

Not that much of a rebel, I checked my policy and I am covered SD&P

 

[ched999uk]

I keep it simple and put all expenses in regards to the van through every tax year. Cash basis accounting is really easy esp if your a sole trader working on your own in the 20% tax bracket(using cleaner planner)so HMRC only get my total turnover and whole,yearly expenses.

The only way they would know every single expense would be if I got an investigation.

The info HMRC gets is governed by their forms, so they don't actually get much info even though the forms have a silly number of boxes . It can be very simple but sometimes there is stuff you can claim for to reduce your tax bill. Judging by what you have said I doubt an accountant could actually save you any where near what they would charge.

 

[Part Timer]

Not that much of a rebel, I checked my policy and I am covered SD&P

But your claiming mileage allowance so fall into a different bracket. 2 of our vans are fully business only, my Peugeot Partner is mileage as well so this is what I use for SD&P

 

[spruce]

I keep it simple and put all expenses in regards to the van through every tax year. Cash basis accounting is really easy esp if your a sole trader working on your own in the 20% tax bracket(using cleaner planner)so HMRC only get my total turnover and whole,yearly expenses.

The only way they would know every single expense would be if I got an investigation.

This is true. You always know that their interpretation of what is business and pleasure/private will be different to yours if they do an investigation.

 

[Iron Giant]

This is true. You always know that their interpretation of what is business and pleasure/private will be different to yours if they do an investigation.

This is one of the reasons I have an accountant, he can go through everything and tell me if I'm trying to take liberties and dismiss stuff

 

[J.Hargreaves]

When you say "new" are you talking new to you or brand new

If you have information on both new and brand new please share

 

[dazmond]

This is one of the reasons I have an accountant, he can go through everything and tell me if I'm trying to take liberties and dismiss stuff

I really don't need an accountant. My window cleaning business is very straightforward and book keeping is so easy these days with round software and CP app on my phone. I know what I can claim for and I do know some things are a grey area in regards to clothing(my waterproof boots,jackets and trousers are put through as PPE along with my nitrile gloves). My embroidered polo shirts and hoodies go through as workwear. I also claim for every bit of stationary(ink,A4 paper,stamps,envelopes,business cards,leaflets etc).
I even put down £60 a year for washing my work clothes!

 

[Part Timer]

If you have information on both new and brand new please share

This very much depends on your company structure, sole trader, partnership or Ltd, turnover and profit, something you shouldn't really post on here.

 

[Iron Giant]

I really don't need an accountant. My window cleaning business is very straightforward and book keeping is so easy these days with round software and CP app on my phone. I know what I can claim for and I do know some things are a grey area in regards to clothing(my waterproof boots,jackets and trousers are put through as PPE along with my nitrile gloves). My embroidered polo shirts and hoodies go through as workwear. I also claim for every bit of stationary(ink,A4 paper,stamps,envelopes,business cards,leaflets etc).
I even put down £60 a year for washing my work clothes!

Mine is as well but for what it costs in accounting fees it's a drop in the ocean compared to my earnings, plus I'm a lazy sod so at least I get mine checked over and mine has saved me a fair amount of money over the years and I'm in a partnership so having a professional advise me over the years has helped a lot.

 

[spruce]

I really don't need an accountant. My window cleaning business is very straightforward and book keeping is so easy these days with round software and CP app on my phone. I know what I can claim for and I do know some things are a grey area in regards to clothing(my waterproof boots,jackets and trousers are put through as PPE along with my nitrile gloves). My embroidered polo shirts and hoodies go through as workwear. I also claim for every bit of stationary(ink,A4 paper,stamps,envelopes,business cards,leaflets etc).
I even put down £60 a year for washing my work clothes!

But @J.Hargreaves does atm. The fact that he is asking these questions means he has no idea of what to do - no offence meant, Mr Hargreaves.

In my early days, I was fortunate to buy a second hand van without finance. In those days we had 'write down allowance' to a DWP formula which allowed us to devalue our asset (the van) each year.
Then this was stopped, and we were given 'annual investment allowance' which gave us the ability to write the van off in the tax year of purchase. (This was fine for big companies, but it didn't really benefit the small sole trader businessman.)

But as he won't be earning much, he needs to be very careful on how he writes the value of his asset off against tax.

For example, even if he has cash to buy a van outright, he may choose to rather lease it or buy it on HP or PCP as this will help him claim his monthly payments against tax rather than the full value of the van through AIA. This is especially true when he finds that he probably won't earn enough in his first year or two to pay tax.

He also has the option of owning the van but claiming a daily mileage allowance for business use. (I don't know what it is now, but I seem to remember a figure of 45p a mile quite a number of years ago. But this requires keeping a daily mileage record, which would drive me nuts.)

This is why he needs to talk to an accountant. Once he becomes established and his accountant has pointed the best way forward, then he can choose whether to keep with him or do the tax returns himself.

The other thing is that once he has chosen a tax direction, he can't change that for the duration he owns the van. It can only do something different if he sells the van or buys a new one.