Sole trader new van.

[Adam the gardener]

Hi,

I am a sole trader with about £18k annual turnover and using cash basis accounting I think on my self assessment tax return i.e recording actual sales and expenses as they are received and paid within the tax year. I don't use the mileage allowance but rather the actual motor expenses incurred in a year.

I've just sold my old van for £500 and bought a new van for £5000 by bank transfer, i.e without a loan or hire purchase.

My queries are:
1. When it comes to my next tax return, can I claim the full cost of the new van as an expense?

2. Do I treat the proceeds from selling my old van as if it is money from a client?

3. In other words, can I claim £4500 as an expense for the new van, minus the income from selling the old van?

4. Do I need to adjust the £4500 figure for my personal use, which is usually about 10% of the total annual motoring expenses.

Thank you very much for your help!

Adam.

[bd6759]

1. Not quite
2. Not quite
3. Not quite, because
4. Yes

Basically 90% of the disposal is income and 90% of the new cost is an expense.

[Adam the gardener]

Thanks!

So, I can claim £4050 as an expense for the new van on my next self assessment tax return?

And, I enter £450 as income for the sale of the old van.

Sorry if it's obvious questions to you but I'm a bit confused.

Thanks again!

Adam.

[Adam the gardener]

Hi again,

Or, is it £4500 as an expense claim for the new van, to take into account 10% personal use?

And, £450 as income for the sale of the old van.

Thank you for your time and help!

Adam.

[bd6759]

Income = 90% of 500 = 450

Expense = 90% of 5000 = 4500

[Adam the gardener]

Thanks very much.
That's very helpful.
Adam.