Buy or lease hire?

Discussion in 'Chit Chat & Introductions' started by Danfire, Oct 29, 2015.

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  1. Danfire

    Danfire Well-Known Member
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    #1 Danfire, Oct 29, 2015
    Last edited: Oct 29, 2015
    For the last few years I've been using the family estate car to do the cleaning. I'm getting fed up loading/unloading and then there are days I could be cleaning but family stuff means the cars unavailable. I'm seriously thinking about getting a van, my limited understanding is if I buy one I can claim a percentage of its value for three years as a business cost whereas I guess if I lease one the cost of the lease comes off my profit.
    My questions is; has anyone done the maths to work out which is the most tax efficient way to run a company van?
     
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  2. Jake

    Jake Grand Master
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    Buy a second hand van outright if you can mate, leasing is fine but you'll be paying x amount for a long time, and although You can put it through the books (I think) you'll still be paying for it every month, you just won't pay tax on the monthly payments...

    Always buy outright if you can afford to, it's always more cost effective, you can get a nice transit connect for £2500 these days

    We bought our family car on hpi, £150 a month with a 3k deposit, now paying £150 for the next 4 years... We would have preferred to buy outright but got a bit carried away lol

    Imagine paying that over 3-4 years for your van? Not brilliant thought....

    Glad my vans bought outright, makes such a difference to monthly bills,

    So try buy a van outright :thumbsup:
     
  3. steve garwood

    steve garwood ginger lion
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    Got a customer who owns an electrical firm, he is seriously minted. He told me that although he can afford to buy his vans (3) outright with cash, he gets them on the drip with a very low interest on top because he claims vat on the monthly payments. Then he leaves his cash in an I.s.a to earn interest.
     
  4. jack b

    jack b Newcomer
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    I suspect he might be VAT registered Steve, earning in excess of 80K, ( I think that is the figure needed to be VAT registered)
    If so, it probably makes sense in his circumstances, see quote below, to claim it back bit by bit.
    I am not vat registered and asked an accountant a similar question recently. He said that if you are not VAT registered, it makes more sense, financially, to buy your van outright. !!
    Just my two penny worth.........hope it helps.

     
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  5. tench0771

    tench0771 Grand Master
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    i thault that leasing is 100 percent tax ductable?
     
  6. daveyboy

    daveyboy Legend
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    It is..for example if you pay 100 quid a month you put 1200 quid on expenses when you do your return
    Buying a van you can only write off a 3rd of the value yearly for 3 years
     
  7. tench0771

    tench0771 Grand Master
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    so does that mean u lose a quater of wat u pay then say a van cost £1200 u only get £900 back ?
     
  8. daveyboy

    daveyboy Legend
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    No if you buy a van for 3k you can put 1k through your tax return yearly for 3 years ..you still claim 3k but in 3 installments
     
  9. Green Pro Clean Ltd

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    Comes under vehicle running expenses, the 45p per mile for 10K miles then 25p per mile after that.

    As with all these questions I advise go see an accountant as they will give you a free 30 min consultation and answer all those sorts of questions.

    I don't remember why but my accountant tells me to buy my vehicles outright, at least you then own the asset, if leasing you are paying nothing more than a rental fee with nothing to show for it later.

    Before considering finance make sure you ask your bank what the rates on a loan would be as you would probably get better rates than a finance company.

    My last van (£2800) I paid for on my credit card then paid that down as the rates were lowest. Cause I bought it used I got it for a steal I have had 10 good months of use from it so far, no issues at all, paid credit card off in 3 months so interest was probably less then £50 and the van has lost none of it's purchase value so far.
    Also I have more than covered the costs on ta relief at 45p per mile.
     
  10. Jake

    Jake Grand Master
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    I think with a van it's always better to buy outright, as your gonna be customising it etc, so not good if you were to hand it back to the dealer, you'd lose ya deposit
     
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