New vehicle and claiming expenses

[leep82]

Hi all as the thread title suggests im looking at purchasing a new van and was wondering if anyone could shed any light on whether i could claim any of the cost back as an expense. This tax year is my first full year being self employed. Ive read about somthing called AIA but unsure as to what it involves. Any help/advice most appreciated

 

[telectrix]

you used to claim for all running costs and write off the cost of the van over 4 years. hmrc do a scheme whereby you claim mileage allowance to cover all. it was 45p/mile for 1st 10,000 and 25p/mile thereafter. it's an easy way as you just log miles every month and submit a claim based on the year's mileage on your tax return. so for example. if you do 10,000 miles you get £4500 as an tax free expense.

 

[leep82]

Is the

you used to claim for all running costs and write off the cost of the van over 4 years. hmrc do a scheme whereby you claim mileage allowance to cover all. it was 45p/mile for 1st 10,000 and 25p/mile thereafter. it's an easy way as you just log miles every month and submit a claim based on the year's mileage on your tax return. so for example. if you do 10,000 miles you get £4500 as an tax free expense.

Is the AIA somthing completely different then? Can i not claim any expense back on the cost of a new vehicle if im claiming that 45p a mile flat rate?

 

[Midwest]

You can claim something back for the cost of the van, but like anything you buy for your business, not sure exactly what. I just pay my accountant to deal with these sorts of things.

 

[telectrix]

if i'm right. the 45p/mile allows for depreciation of the vehicle.

 

[Deleted member 26818]

You can claim the full cost of a vehicle (up to £50,000) as an expense.
You then claim the running costs.
The 45p per mile scheme is for using private vehicles for work.

When you claim for expenses, you get back the 20% tax you would of paid.
If you are registered for VAT, then you can also claim that back.

 

[Octopus]

If you spend £10000 on a vehicle, it reduces your tax and NI liability by £2900

 

[Octopus]

AND so if you buy the vehicle before the end of this financial year, then the tax you pay is less, leave it until the next tax year and wait a year.....

If your earning are low this year you can opt to put some of the cost this year and then further next year.....

As its your first year I would advise that you pay an accountant ........

 

[leep82]

Thanks for the replies. Am i right in thinking that i cant claim back the cost of a new van and all the mileage occurred on my old van at the flat rate?

 

[Octopus]

Speak to an accountant...

 

[Deleted member 26818]

The benchmark mileage allowance was introduced for employees using their private vehicles for work purposes.
It has been extended to cover self employed.
The allowance takes account of fuel, wear and tear, insurance, car tax, mot and maintenance.

As far as I am aware, you cannot claim the mileage allowance for a vehicle used solely for business use.
You instead claim for all costs associated with purchasing and running the vehicle.

If your old van is your private vehicle and your new van is your business vehicle, then you can claim for both the mileage on the old van and the purchase of the new van.

 

[leep82]

My old van is a private vehicle as would be my new one. Although it would primarily be used for work, i do still use my current van, and would do any new van socially

 

[123]

You can either get tax relief on actual vehicle costs, minus any personal usage (no one uses a van for personal use). That would cover Purchase, MOT, Fuel, Tax, Insurance, Upkeep etc.

Or get tax relief on the simplified mileage allowance. The mileage allowance covers everything, you can get tax relief on no other costs on the vehicle.

You can't do both, and you can't alternate between the two for that particle vehicle. If you get tax relief with the simplified mileage allowance method you don't have to declare anything upon selling the vehicle, as you won't have gotten any tax relief when purchasing it.

 

[123]

My old van is a private vehicle as would be my new one. Although it would primarily be used for work, i do still use my current van, and would do any new van socially

Then use the simplified vehicle expenses
Sadly the mileage rate is exactly the same as it was some 15 or so years ago

 

[Deleted member 26818]

It’s gone up from 44p to 45p for the first 10,000 miles.

 

[123]

It’s gone up from 44p to 45p for the first 10,000 miles.

It has been 45p for quite some time.

 

[Octopus]

My old van is a private vehicle as would be my new one. Although it would primarily be used for work, i do still use my current van, and would do any new van socially

If you are a sole trader you van is your van..... I don't think you can use the 45 p per mile route.

 

[Deleted member 26818]

If you are a sole trader you van is your van..... I don't think you can use the 45 p per mile route.

Unless you have claimed the purchase price of a vehicle against tax, it will be a private vehicle sometimes used for business, so you would be able to claim the mileage rate.