Van purchase

[llywelyn111]

Hi,

Been offered a good deal on a used van as mine is nearly dead. (vauxhall combo flywheels pooh) The van is 5k + vat. We are a LTD company and are vat registered. Can someone explain to me in a idiot guide how it works to claim against tax. I have had a brief chat with my accountant, but he just seems to speak in code.

 

[buttonmoon]

Assuming that it is the company buying the van then you need to work out whether there is any significant personal use. The law defines the limited company's property as different to your own and any significant use would be called a 'benefit in kind' and would affect your personal tax liability. As your limited company is VAT registered and there is VAT being charged on the van you should be able to reclaim the VAT but you would need to check that you are going to receive a VAT receipt. Also you can I believe reduce you corporation tax liability by claiming 100% Annual Investment Allowance through your Capital Allowances or if your profits are already low for the period in question, you can claim a proportion of the amount over a number of years. I would go back to your accountant and ask for an explanation in simpler terms with your options clearly explained as they relate to financial outcomes. These rules and the rates and thresholds involved change every year or two and your accountant should have a detailed idea of your precise circumstances so only they can really give you exact advice in this area. Also it might help to look up the meanings of these terms in a little detail before you start paying an accountant's hourly rate to act as your dictionary. I hope this helps, good luck.