Capital allowances for a van?

steamouk

Hi,

I bought a works van for £12000 on HP which totaled £14500 with finance.

What do I claim for this on a Self employed tax return?

I have read I can claim 50% is this correct? If so does that mean I can claim £6000 in the tax return for it and what about the interest I have to pay on Hire purchase agreement, can I claim for that also??

Any advice would be helpful, Capital allowances go way over my head?

roger_c

You don't say if you have any private use of the van or if it is exclusively used for business? This will affect how the capital allowances are worked out.

I take it the van cost £12,000 and the finance £2,500?

You can claim the interest as a deduction from your profits, less any private use restriction. The capital part of the cost is the part which goes into the capital allowances computation.

steamouk

I use the van exclusively for business purposes. I'm a self employed builder.

Yes thats correct the van is £12000 and the additional £2500 is finance.

For capital allowance then I would use the £12000 figure for the van and the £2500 as interest?

With capital allowance on a van bought in that year is the rate 50% of the value? So would I enter £6000 as the capital allowance in the tax return or have I got the wrong idea?

Money_Grabber13579

steamouk wrote: »

I use the van exclusively for business purposes. I'm a self employed builder.

Yes thats correct the van is £12000 and the additional £2500 is finance.

For capital allowance then I would use the £12000 figure for the van and the £2500 as interest?

With capital allowance on a van bought in that year is the rate 50% of the value? So would I enter £6000 as the capital allowance in the tax return or have I got the wrong idea?

From 6th April 08, you would be entitled to an Annual Investment Allowance of 100% of the asset value, up to total expenditure of £50,000. So if your relevant period that you are preparing accounts for is after that date, then the full £12,000 will be allowable. If your accounts straddle that date, some apportionment will be required.

Bear in mind that you don't have to claim capital allowances, however this would only be beneficial if claiming them would throw you into a loss making situation, or was causing you to waste your personal allowance.

Ste_C

The £2500 interest is payable over 36 or 48 months though surely, so you can't put all £2500 as an expense this year.

If the interest is at £70 per month or whatever, then you can put down £840 this year, £840 next year and the year after until the HP agreement has expired.