You sent me to this video from a comment i made on anothr of your videos. You said you cant claim caputal allowance when using cash basis...but what about claiming the 18% per year under plant and machinery option using cash basis ?
You don’t usually claim the 18% on p&m when using cash basis. This is rarely used regardless for P&m because you will only use if forced to due to restrictions. Most time you will claim Annual Investment Allowance which is 100% in year one, which is equivalent to how the cash basis deals it by expensing the whole cost in that year.
Hey guys I’m a musician who’s a sole trader who only drives a car could you guys expand on the car purchase tax relief you mentioned? I think I’ve got my head around day to day expenses and running costs but purchase has me stumped!
Hi. Can I choose a fixed percentage of the van's costs (including initial purchase of the van) and deduct against tax? And if I do, can I ammend it each year if required? Thanks, I love your videos!
Hi this is a really helpful video. I am a landlord who has a separate full time job. I want to purchase a 2nd hand van and will use it for approx 20% of the time for landlord related travel. Will I be able to claim back 20% of the cost each year for 5 years against my tax bill?
This one is tough to cover in a comment, but the apportionment depends on if you prepare your tax return under cash or standard/accruals accounting, as it determines what boxes you use and when/how you get relief. With a van it might be possible to claim 20% in one hit year 1 rather than across the years. Sorry that's a bit vague, its probably a video in itself, so much to cover here.
Hi Dan, could you make a video of what constitutes as a van? I have a ltd company and was looking at getting something like a Ford Transit custom with 5 seats however I fear this may class as a car?
I’m starting up a small business, self employed no vat, and I’ve just bought a second hand van and I heard that I can claim 20% each year over 5 years on the cost of my van (capital allowance?), as I’m not going to earn enough money in my opening year to benefit from 100% of the cost of my van off my tax bill, thanks
You might still be able to use the 100%, as you could take any unused loss forward into next year. This might still get you the tax relief quicker. Whether this is better though depends on your total income level for the year.
Just after some advice please. Sole trader, use cash basis but not simplified expenses for self assessment, so usually claim fuel, vehicle maintenance, insurance tax etc not just mileage. Purchased a commercial vehicle in the tax year. Can the deposit and repayments be claimed under “vehicle expenses” or can the full vehicle purchase price be claimed, and what under (capital allowances or expenses). If the whole vehicle is claimed can I still claim the expenses (as above) associated with the vehicle too or just the vehicle purchase cost. Thank you in advance
Hi Ruth, Hard to unpick all in a comment here, but in general *If cash basis, presuming vehicle qualifies as a 'van', and you have 'bought' it, the total sale price (less any % for personal use) goes in an expenses box. *Capital allowances aren't in play on a van if cash basis The challenge a lot of the time is figuring out if you've bought the Van, as some forms of finance won't count as ;bought; for the purposes of claiming total cost. For example you might have a lease rental and then you would just claim the payments.
Hi, can you actually go back and amend a self-assessment tax return to add a professional fee that you missed out? Would you recommend doing that? Many thanks
There's always someone that doesn't fit in with all the others. Thats me. I am a Self Employed Private Tour Guide, that runs my own company. I bought a £55,000 second hand Mercedes V Class to do the job. It carries up to 7 customers plus me. I use it 95% for business. This is my 2 nd year of using the van/car and am unsure what catergory I fall into. I basically drive from my house to various pick up address either in Central London, Heathrow or Southampton docks, from there, I travel approximately 300 miles a day on various tours. How would you recommend I deal with Capital Allowances in this job if at all. My expenses are larger than my mileage allowances so have done previous returns as "lump sum". Thanks for any advice you could give me.
There are a couple of key decisions you need to make on this 1 Are you preparing your books on a cash or 'accrual'/standard basis? 2 Are you claiming mileage rates or actual costs at 95% When you've made the above, then that determines if/how capital allowances are claimed. This may help www.litrg.org.uk/working/self-employment/calculating-self-employed-profits/accounts-cash-basis#
Hi. Is the interest on the HP finance deductible with the cost of the van purchase in the first year? If so would you claim interest paid each year or the full amount over the term of the agreement? Thank you.
what then happens if you use a van you've claimed total value of in a px for a newer one? Do you then have to note the px price as income or can you just claim the new van total as well?
If you are using the cash basis effectively yea you’d have ‘income’ of the px and expense of the new one, presuming ‘usual’ qualifying conditions are met.
Hi, I am a sole trader, and I am looking to purchase a second hand van today from a private seller. The van cost is £6000 (no VAT) . Do I need to pay it via bank transfer so as the transaction can be traced - and also, do I need to ask the seller for a receipt/invoice? And from what I understand, I can literally just add the full £6000 as a business expense for this tax year. Is that correct?
thannks, I ended up buying through a dealer so have a receipt and all tracable via bank transfer. How do I claim this on my tax return in april? Where do I put the £7500 van price? I was told by a friend of mine who does accounting to put any longer term investments generally over £100 as capital allowances (van, tools, etc). Is this right? and where do enter these figures on the tax return?@@HeelanAssociates
Hi you mentioned in this video if you already own a van and start a business you can still claim tax relief ? As a sole trader using cash basis accounting how does this work?
Hi Dan, say if I was going to buy a 10k Van. How would I go about claiming this as tax deductible? Would it be 20% every year for 5 years? So £2000 a year? How does it work?😁 Thanks in advance
It depends how you prepare your records/tax return. If you use the cash basis and the van 'qualified' (as a van as far as tax rules were concerned) you normally stick all the £10k in an expense box on your tax return and get the relief in year one. If you prepare your books on the 'standard' (dates/accruals) way, there is a different box (something called capital allowances), but usually relief will worth the same, you would get it all in one year via something call Annual Investment Allowance. Sorry its hard to explain in a comment here! Some good detail here: www.litrg.org.uk/working/self-employment/calculating-self-employed-profits
Hi Dan, just after some advice, im self employed & bought a van for £20,000.00 on finance- Can I claim the full £20,000.00 as capital allowance back in the first tax year of purchase along with running costs such as fuel, insurance etc? Or Can I claim back £5,000.00 for 4 years as Capital allowance + running costs each year? Thanks, great videos.
It depends (sorry accountant answer). If you have a 'true' van that qualifies for capital allowances yes its likely you could claim whole cost as Annual Investment Allowance. If you do this you'd then claim running costs in both that year and other years you carried on using for business. In both cases you'd the consider disallowing a % of the claim if you used it personally. If you don't claim the cost in year one (or cant as its say a car not a van), you'd claim a % of the initial cost in capital allowances each year (this % is based on the Co2 emissions of the vehicle).
@@HeelanAssociateswhen I bought my current 2016 van back in 2018, the dealer said I had to pay the VAT as a deposit. Have I just paid an additional £2500 where there was no vat chargeable. Van was £12,000 plus VAT
My case is a bit unusual, i work an hour and a halfs drive from where i live, i work 6 days a week and long hours so i prefer to stay overnight next to the place i work and only go home the night before my day off. I would buy a van to make into a bit of a camper, but also it would be for my work gear and hauling around the odd bits and bobs for work. I would keep the van/camper for at least 3 years and look to change it with the same kind of thing. Do you think i could still claim for the cost of the van, which would be around 15k. Thank you, i really found this video informative, but i cant find any details on my scenario anywhere. Thanks!!
Sorry this one we'd have so many extra questions on, and its a long explanation across multiple taxes, so couldn't answer in a comment here. Would say get some specific advice/opinion on this one. Sorry we couldnt help more here,
Hello and help, so , I buy a van say 30,000.00 plus vat, I understand the vat part, so I can claim back 100per cent of 30k x 19percent CT , so I save £5700.00 from my ct tax bill and when I sell it in 5 years for 10k plus vat I get taxed £1900.00 is that correct, thanks in advance
Hi, so what you describe is a likely scenario yes, but I am presuming a lot (such as the ability to claim the right capital allowances etc). In a generic scenario where the tax rates are 19% this is a common outcome yes.
@@HeelanAssociates Everybody is under the impression they claim the or the 30,000.00 off there tax bills, some accounts fail to explain the correct figures and never mention when you sell you have to pay the tax back, thanks for being transparent. We will more than likely all be bankrupt after the budget. When Labour crash the economy.
@@HeelanAssociates as I was going through the process, it says ‘this loan cannot be used for business purposes’ with it being a work van therefore a business.
Great videos. Thank you. I've got a strange scenario. I quit my job in february and go self-employed. I also purchase a second-hand van in february for £15k cash. Because I only have two months of work in that tax year, how or what can I claim for regarding the cost of the van? Let's say I make £4k in february and march and spent £15k on the van, for example. Thanks in advance, and keep up the good work.
Oddly the two months doesn’t change the way it works. So it’s likely you would just have a tax loss (depending how the van was funded) to bring forward or even use against other income. It’s hard to describe the various scenarios in a comment here.
Presuming you mean after you’ve claimed tax relief, you’d retain proof and that would be it. If there was truly no value there is no adjustment. This can happen if say it got wrote off and for some reason insurance didn’t pay out.
I only got a tenner selling it though, my mate was chuffed
Sweet deal.
You sent me to this video from a comment i made on anothr of your videos. You said you cant claim caputal allowance when using cash basis...but what about claiming the 18% per year under plant and machinery option using cash basis ?
You don’t usually claim the 18% on p&m when using cash basis. This is rarely used regardless for P&m because you will only use if forced to due to restrictions. Most time you will claim Annual Investment Allowance which is 100% in year one, which is equivalent to how the cash basis deals it by expensing the whole cost in that year.
Hey guys I’m a musician who’s a sole trader who only drives a car could you guys expand on the car purchase tax relief you mentioned? I think I’ve got my head around day to day expenses and running costs but purchase has me stumped!
We will add this one to the video list ‘to do’. It’s not a simple one to do so never seems to make the top of the list 😃
Hi. Can I choose a fixed percentage of the van's costs (including initial purchase of the van) and deduct against tax? And if I do, can I ammend it each year if required? Thanks, I love your videos!
This may help SELF-EMPLOYED MOTOR EXPENSES EXPLAINED!
th-cam.com/video/PPnzNvLp3k8/w-d-xo.html
You have to treat the vehicle same way each year.
Hi this is a really helpful video. I am a landlord who has a separate full time job. I want to purchase a 2nd hand van and will use it for approx 20% of the time for landlord related travel. Will I be able to claim back 20% of the cost each year for 5 years against my tax bill?
This one is tough to cover in a comment, but the apportionment depends on if you prepare your tax return under cash or standard/accruals accounting, as it determines what boxes you use and when/how you get relief.
With a van it might be possible to claim 20% in one hit year 1 rather than across the years.
Sorry that's a bit vague, its probably a video in itself, so much to cover here.
@ thanks for the reply. It would be great to see a video I. This if you get the opportunity.
Hi Dan, could you make a video of what constitutes as a van? I have a ltd company and was looking at getting something like a Ford Transit custom with 5 seats however I fear this may class as a car?
Probably quite topical right now as this has had some changes! Will add to the list
I have 6 seats and my Vito is classified as N1 van, not M1 car on the V5. It's either a van or a car.
I’m starting up a small business, self employed no vat, and I’ve just bought a second hand van and I heard that I can claim 20% each year over 5 years on the cost of my van (capital allowance?), as I’m not going to earn enough money in my opening year to benefit from 100% of the cost of my van off my tax bill, thanks
You might still be able to use the 100%, as you could take any unused loss forward into next year. This might still get you the tax relief quicker. Whether this is better though depends on your total income level for the year.
Just after some advice please. Sole trader, use cash basis but not simplified expenses for self assessment, so usually claim fuel, vehicle maintenance, insurance tax etc not just mileage. Purchased a commercial vehicle in the tax year. Can the deposit and repayments be claimed under “vehicle expenses” or can the full vehicle purchase price be claimed, and what under (capital allowances or expenses). If the whole vehicle is claimed can I still claim the expenses (as above) associated with the vehicle too or just the vehicle purchase cost. Thank you in advance
Hi Ruth,
Hard to unpick all in a comment here, but in general
*If cash basis, presuming vehicle qualifies as a 'van', and you have 'bought' it, the total sale price (less any % for personal use) goes in an expenses box.
*Capital allowances aren't in play on a van if cash basis
The challenge a lot of the time is figuring out if you've bought the Van, as some forms of finance won't count as ;bought; for the purposes of claiming total cost. For example you might have a lease rental and then you would just claim the payments.
Hi, can you actually go back and amend a self-assessment tax return to add a professional fee that you missed out? Would you recommend doing that? Many thanks
You have around 12 months to amend online, so it’s usually totally fine to do this.
@HeelanAssociates Thank you very much
There's always someone that doesn't fit in with all the others. Thats me. I am a Self Employed Private Tour Guide, that runs my own company. I bought a £55,000 second hand Mercedes V Class to do the job. It carries up to 7 customers plus me. I use it 95% for business. This is my 2 nd year of using the van/car and am unsure what catergory I fall into. I basically drive from my house to various pick up address either in Central London, Heathrow or Southampton docks, from there, I travel approximately 300 miles a day on various tours. How would you recommend I deal with Capital Allowances in this job if at all. My expenses are larger than my mileage allowances so have done previous returns as "lump sum". Thanks for any advice you could give me.
There are a couple of key decisions you need to make on this
1 Are you preparing your books on a cash or 'accrual'/standard basis?
2 Are you claiming mileage rates or actual costs at 95%
When you've made the above, then that determines if/how capital allowances are claimed.
This may help www.litrg.org.uk/working/self-employment/calculating-self-employed-profits/accounts-cash-basis#
Hi. Is the interest on the HP finance deductible with the cost of the van purchase in the first year? If so would you claim interest paid each year or the full amount over the term of the agreement?
Thank you.
The interest is usually claimed each year over the length of the loan.
Thank you. And can I claim the cost of the second hand van in the first year? It was £3900.00.
what then happens if you use a van you've claimed total value of in a px for a newer one? Do you then have to note the px price as income or can you just claim the new van total as well?
If you are using the cash basis effectively yea you’d have ‘income’ of the px and expense of the new one, presuming ‘usual’ qualifying conditions are met.
Hi, I am a sole trader, and I am looking to purchase a second hand van today from a private seller. The van cost is £6000 (no VAT) . Do I need to pay it via bank transfer so as the transaction can be traced - and also, do I need to ask the seller for a receipt/invoice? And from what I understand, I can literally just add the full £6000 as a business expense for this tax year. Is that correct?
It’s all about ‘records’. Bank transfer and receipt is obviously a great method but as long as you evidence it in case of inspection it’s fine.
thannks, I ended up buying through a dealer so have a receipt and all tracable via bank transfer. How do I claim this on my tax return in april? Where do I put the £7500 van price? I was told by a friend of mine who does accounting to put any longer term investments generally over £100 as capital allowances (van, tools, etc). Is this right? and where do enter these figures on the tax return?@@HeelanAssociates
Hi you mentioned in this video if you already own a van and start a business you can still claim tax relief ? As a sole trader using cash basis accounting how does this work?
Hi Dan, say if I was going to buy a 10k Van. How would I go about claiming this as tax deductible?
Would it be 20% every year for 5 years? So £2000 a year? How does it work?😁
Thanks in advance
It depends how you prepare your records/tax return.
If you use the cash basis and the van 'qualified' (as a van as far as tax rules were concerned) you normally stick all the £10k in an expense box on your tax return and get the relief in year one.
If you prepare your books on the 'standard' (dates/accruals) way, there is a different box (something called capital allowances), but usually relief will worth the same, you would get it all in one year via something call Annual Investment Allowance.
Sorry its hard to explain in a comment here! Some good detail here: www.litrg.org.uk/working/self-employment/calculating-self-employed-profits
What about van lease which includes the insurance?
If you use 'actual costs' for basing your expense claim, motor insurance is generally claimable.
@@HeelanAssociates the van rental come with the insurance so is that claimable on tax return?
Hi Dan, just after some advice, im self employed & bought a van for £20,000.00 on finance- Can I claim the full £20,000.00 as capital allowance back in the first tax year of purchase along with running costs such as fuel, insurance etc? Or Can I claim back £5,000.00 for 4 years as Capital allowance + running costs each year? Thanks, great videos.
It depends (sorry accountant answer).
If you have a 'true' van that qualifies for capital allowances yes its likely you could claim whole cost as Annual Investment Allowance.
If you do this you'd then claim running costs in both that year and other years you carried on using for business. In both cases you'd the consider disallowing a % of the claim if you used it personally.
If you don't claim the cost in year one (or cant as its say a car not a van), you'd claim a % of the initial cost in capital allowances each year (this % is based on the Co2 emissions of the vehicle).
Correct me if I'm wrong, I thought there was no VAT on vans?
Normally on second hand ones there won’t be (depends who / how sold) but normally will be on new ones.
@@HeelanAssociateswhen I bought my current 2016 van back in 2018, the dealer said I had to pay the VAT as a deposit. Have I just paid an additional £2500 where there was no vat chargeable. Van was £12,000 plus VAT
A decent van will be plus vat most of the time , especially from a dealer
My case is a bit unusual, i work an hour and a halfs drive from where i live, i work 6 days a week and long hours so i prefer to stay overnight next to the place i work and only go home the night before my day off.
I would buy a van to make into a bit of a camper, but also it would be for my work gear and hauling around the odd bits and bobs for work.
I would keep the van/camper for at least 3 years and look to change it with the same kind of thing.
Do you think i could still claim for the cost of the van, which would be around 15k.
Thank you, i really found this video informative, but i cant find any details on my scenario anywhere.
Thanks!!
Sorry this one we'd have so many extra questions on, and its a long explanation across multiple taxes, so couldn't answer in a comment here.
Would say get some specific advice/opinion on this one. Sorry we couldnt help more here,
Hello and help, so , I buy a van say 30,000.00 plus vat, I understand the vat part, so I can claim back 100per cent of 30k x 19percent CT , so I save £5700.00 from my ct tax bill and when I sell it in 5 years for 10k plus vat I get taxed £1900.00 is that correct, thanks in advance
Hi, so what you describe is a likely scenario yes, but I am presuming a lot (such as the ability to claim the right capital allowances etc). In a generic scenario where the tax rates are 19% this is a common outcome yes.
@@HeelanAssociates Everybody is under the impression they claim the or the 30,000.00 off there tax bills, some accounts fail to explain the correct figures and never mention when you sell you have to pay the tax back, thanks for being transparent. We will more than likely all be bankrupt after the budget. When Labour crash the economy.
Can I get a personal loan to buy a van as a sole trader, the bank says I cannot
Sounds like the bank getting confused or talking about their specific product. As a sole trader the loan you obtain is linked to you either way.
@@HeelanAssociates as I was going through the process, it says ‘this loan cannot be used for business purposes’ with it being a work van therefore a business.
Hi, can you do one on leasing an EV, Self Employed.
Yes certainly could. Similar rules actually but more complicated because of being a car.
Great videos. Thank you. I've got a strange scenario. I quit my job in february and go self-employed. I also purchase a second-hand van in february for £15k cash. Because I only have two months of work in that tax year, how or what can I claim for regarding the cost of the van? Let's say I make £4k in february and march and spent £15k on the van, for example. Thanks in advance, and keep up the good work.
Oddly the two months doesn’t change the way it works. So it’s likely you would just have a tax loss (depending how the van was funded) to bring forward or even use against other income. It’s hard to describe the various scenarios in a comment here.
@@HeelanAssociates The van was purchased using savings. Thanks for your reply. 👍
What if you give the van away for free because it is broken
Presuming you mean after you’ve claimed tax relief, you’d retain proof and that would be it. If there was truly no value there is no adjustment. This can happen if say it got wrote off and for some reason insurance didn’t pay out.