Buying existing Burger van Business

[Incredulum]

Right.

You will need to agree with the vendor the value of the van and its contents. (He will need this number for his own tax calculations*.) You will get a tax deduction for this sum in the first year (assuming you haven't spent another 20k on other machinery on this or any other business you may have).

There is no rent payable on the layby, nor are you acquiring any "right" to trade from there - presumably you're just "squatting". Therefore the balance is presumably a payment for goodwill, which will not be tax deductible until you sell the van on - at which point it will come into the CGT calculation on the goodwill.

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*N.B. it will probably suit him for tax purposes for this number to be as low as possible, whilst it will suit you for this to be as high as possible. The correct value is market value - there may be some arguing over this, but make sure the contract for purchase includes a note of the split between the goodwill and the plant/machinery.

[burgerman]

Thanks Incredulum

You've been a great help. Appreciate that. I'll try and sort that then and i understand the bit about the cost etc on both sides. Great

[burgerman]

Hi again Incredulum
Just one last question. If for instance my nett profit for year was say £15,000 and having a tax allowance of £7452 and the cost of the van say £4000 would i then only pay in the first year of taxation on £3548?

Thanks again

[Incredulum]

That's the right idea (I haven't checked your numbers).

(You're wasted as a burger flipper, you should become an accountant.)

[burgerman]

Thanks again Incredulum Great Help