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Where Taxpayers and Advisers Meet

Van purchase on cash basis accounting

sippdealer
Posts: 4
Joined: Sun Nov 16, 2014 6:47 pm

Van purchase on cash basis accounting

Postby sippdealer » Tue Jan 08, 2019 3:33 pm

Hi,sorry to take up time, any thoughts appreciated.

Purchased van May 2018 £ 7470.00 no VAT Paid in full ,no loan /lease or HP..Took money from business account to fund purchase

I use cash basis accounting.......can I claim for full purchase costs anywhere..Not AIA but under capital allowances.

Would that be allowed?...If so can/do I still use the 45p/m for 10k miles if purchase is allowed as a capital expense
Don't really want to change from cash basis

Thanks .

Tom7000
Posts: 68
Joined: Wed Aug 06, 2008 3:30 pm

Re: Van purchase on cash basis accounting

Postby Tom7000 » Wed Jan 09, 2019 6:14 pm

You put it in the AIA box. Why do you think you do not?

Yep you can still treat running costs as either mileage or the business % of actuals. Once yo choose a method you stick with it until you get a new vehicle.

tom
www.ttca.co.uk

bd6759
Posts: 2963
Joined: Sat Feb 01, 2014 3:26 pm

Re: Van purchase on cash basis accounting

Postby bd6759 » Wed Jan 09, 2019 6:26 pm

You put it in the AIA box. Why do you think you do not?
Probably because he is using the cash basis and cannot claim capital allowances!

The cost is an expense, and is lumped in with all the other expenses.

robbob
Posts: 2678
Joined: Wed Aug 06, 2008 4:01 pm

Re: Van purchase on cash basis accounting

Postby robbob » Wed Jan 09, 2019 7:26 pm

If so can/do I still use the 45p/m for 10k miles if purchase is allowed as a capital expense
Just be be 100% clear here the 45p/25p claim always covers the full purchase price and running costs of a car or van. So if you are claiming 25/45p per mile you cannot ever claim for the cost of the vehicle or the running costs of that vehicle that applies for normal and cash basis calculations.

For normal basis you can swap from 45p per mile method to claiming "actual costs" when you swap vehicles - unfortunately i can't remember if that rule also applies to cash basis persons.

bd6759
Posts: 2963
Joined: Sat Feb 01, 2014 3:26 pm

Re: Van purchase on cash basis accounting

Postby bd6759 » Wed Jan 09, 2019 7:56 pm

Agreed. If you put the cost though as an expense, so can only claim the actual running costs, not the mileage rates.

sippdealer
Posts: 4
Joined: Sun Nov 16, 2014 6:47 pm

Re: Van purchase on cash basis accounting

Postby sippdealer » Thu Jan 10, 2019 11:16 am

Hi,
Thanks for the replies.appreciated
yes ,I am using cash basis for accounts..

I wanted to introduce into my accounts as a purchase either on AIA or capital allowances ..As I have purchased and introduced I can either use detailed mileage and reclaim or 45p mile for 10k...I really wanted to be able to claim the full purchase price to reduce liability for 17/18
Ideally I would rather claim as an expense in full and still be allowed to claim the mileage in simplified expense/cash basis..Obviously only if that is possible..

Thanks..

sippdealer
Posts: 4
Joined: Sun Nov 16, 2014 6:47 pm

Re: Van purchase on cash basis accounting

Postby sippdealer » Thu Jan 10, 2019 11:20 am

Agreed. If you put the cost though as an expense, so can only claim the actual running costs, not the mileage rates
That for me is the ideal scenario...
Thanks

robbob
Posts: 2678
Joined: Wed Aug 06, 2008 4:01 pm

Re: Van purchase on cash basis accounting

Postby robbob » Thu Jan 10, 2019 2:35 pm

You are fine swapping to the actual method (cost of vehicle and actual running costs ALL adjusted for private use - with NO claim for 45p/25p mile) from 25p/45p mile or vice versa when you are on the cash scheme - as long as the change is done at the time of the vehicle change - as this is a new vehicle that will be fine. If you have previously used an old vehicle under 45p/25p a mile then there will be no adjustment needed in relation to the proceeds received for that vehicle.
Do note though that when this new van is removed from the business (presuming you use actual expenses) you will need to treat the disposal proceeds or market value of income at that later date - so there is a slight sting in the tale at the end of the vehicle ownership - hopefully at that time there will be another similar new vehicle addition that will lesson the blow at that time.

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim70030

which links you across to the following section

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim75005
Once a business has adopted the mileage rate basis for a vehicle, it must be applied consistently from year to year for as long as the vehicle remains in the business. No actual expenditure or capital allowances can be claimed in relation to that vehicle. The business can only change to or from an ‘actual’ basis when a vehicle is replaced.

sippdealer
Posts: 4
Joined: Sun Nov 16, 2014 6:47 pm

Re: Van purchase on cash basis accounting

Postby sippdealer » Fri Jan 11, 2019 2:26 pm

Thanks for all the replies..All very helpful

Regards


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