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Where Taxpayers and Advisers Meet

Van Purchase for sole trader

Elm94
Posts:2
Joined:Sun Mar 04, 2018 6:58 pm
Van Purchase for sole trader

Postby Elm94 » Sun Mar 04, 2018 7:05 pm

I am a young self employed carpenter and I am looking to buy a new van for business use within the current financial year 2017/18 and I would like some advise on how I should treat this within my tax return.
The approximate purchase value is £9000 + VAT . I am also looking to finance the van through a standard HP agreement. I am likely to need a deposit which would be funded through part exchange of my current van which was a cash purchase in May2016 for approx. £3000. This purchase was not included in my tax return for 2016/17. In addition to the part exchange of my existing van I may need to enhance a deposit value through a cash payment.
A friend has mentioned using the Annual Investment Allowance as I have no other business assets, but I’m not sure how I represent this based upon the information above. Do I need to take into account the value of the part exchange and cash payment or do I show the purchase price Including VAT. Also would there be any benefit in making an amendment to my prior years tax return to show my original van purchase?
Furthermore can I deduct the interest on the HP agreement from my taxable profits over the period of the agreement?
I am working on getting an accountant but in the mean time I would be grateful for some advise.
Many thanks

pawncob
Posts:5099
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Van Purchase for sole trader

Postby pawncob » Mon Mar 05, 2018 12:30 pm

AIA will be claimed on the total cost of the van, as per the invoice, regardless of how that is made up. You could revisit last year's return, but it probably isn't worth it.
Yes you can claim the interest element of the HP payments.
With a pinch of salt take what I say, but don't exceed your RDA

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: Van Purchase for sole trader

Postby AdamS93 » Mon Mar 05, 2018 4:59 pm

Are you accounting under the accruals basis or cash basis - the answers will be very different.

Elm94
Posts:2
Joined:Sun Mar 04, 2018 6:58 pm

Re: Van Purchase for sole trader

Postby Elm94 » Mon Mar 05, 2018 7:18 pm

Thanks for the responses so far.

I'm accounting on a cash basis.

bd6759
Posts:4267
Joined:Sat Feb 01, 2014 3:26 pm

Re: Van Purchase for sole trader

Postby bd6759 » Tue Mar 06, 2018 1:36 am

No need to worry about capital allowances with cash basis,

The HP payments are treated as an expense.


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