offsetting the price of a van against your tax

[Matthew77]

Hi all

I'm looking into getting a new van using a lease purchase scheme, I realise that this can work out alot more expensive than buying outright but apparently you can set the monthly payment amounts to suit your earnings, also I understand that some of the cost of the van could be offset against tax for the first 3 years.
Does anyone know how much can be offset say on a £10,000 van. anyone bought a new van on here using a business lease or hired purchase? I'd be interested in your opinions.

Thanks
MAtthew

 

[CBTC]

Yes I have done a purchase lease scheme - it is tax efficient and q good on the final sum repayment, although the monthly figure is higher. Precise % etc I dunno, well have forgotton the details. It would depend on turnover / size of firm to judge if its worthwhile. You have to be a VAT registered co. to be able to do leasing schemes btw.

 

[grumpygrouter]

Hi Matthew, buying a van on "lease purchase" is still classed as a capital asset so would need to be written down via capital allowances.

You may be thinking of an "operating lease" where you never actually own the van. In this case, all lease costs are tax deductable. Unless you are VAT registered this is not normally the best way of obtaining a van.

 

[grumpygrouter]

Yes I have done a purchase lease scheme - it is tax efficient and q good on the final sum repayment, although the monthly figure is higher. Precise % etc I dunno, well have forgotton the details. It would depend on turnover / size of firm to judge if its worthwhile. You have to be a VAT registered co. to be able to do leasing schemes btw.

Not strictly true that, it just means you can't reclaim any VAT if you are not registered.

 

[CBTC]

Ah yes grumpy, could be right... the 2 schemes are worth comparing for anyone looking into it. Depends on if you have balance sheet accounting- I know we have done both. Purchase most recently.

 

[CBTC]

I have only seen leasing offered to VAT registered companies, but I dont know if thats a regulation sure.

 

[grumpygrouter]

I have only seen leasing offered to VAT registered companies, but I dont know if thats a regulation sure.

It is not a regulation as such, just that it becomes economically unviable because of the extra cost.

 

[Matthew77]

I'm a sole trader & not VAT registered. I started trading as a self employed tiler at the start of this year so i've no idea how much i'll earn in the first year.

Would getting a loan or hired purchase be a better option for me then?

Would someone be kind enough to explain how much of the cost of a van you could offset against your tax? (i read somewhere that its a percent of the vans value over 3 years). Although i'm looking into just leaseing a van i'd much rather own it if i can offset some of the value against my tax.

If anyone knows of any websites with info related to this that'd be handy too.

Thanks all for your replys

Matthew