Running a company van

MF2015

I plan on seeing an accountant about a recent sole trader start-up but was looking for info on the best way to run a company van.

Would it be better to buy a van for around £5000 cash then pay myself 40p for the first 10,000 then 25p after that and pay all the running costs myself.

Or get a new van on HPI or the like and put all cost through the company, would this include fuel?

Would be doing less than 30,000 miles a year.

Thanks

Gertie_Walker

Its impossible to say without knowing your business mileage and the running costs of the van. I normally advise clients to keep records for both methods for, say 3 mths, and then decide which is the most beneficial. If you are including the running costs of the van in the accounts, you need to include all the costs of the van, but then you would add back the private use.

chrismac1

There are 2 different questions here - how you finance the van and how you reclaim the costs for tax.

On the financing, you need to weigh up the extra interest on a new van against the reduced repair and maintenance costs. A lot depends on the deal you can get, which can vary widely at the moment depending on the bank's perceived view of the risk.

Whichever purchase method you choose, I agree with Gertie. Do the sums for a few months, then choose the better option. If you go with the actuals and a round sum like 20% for private use, you at least have those 3 months' records to back up that 20% - which is 3 months' more records than any of my clients have despite warnings about the risks of these round sum % values with no proper support.

MF2015

Thanks for the replies, the van will be used for work only so no private use as I have 2 other cars in the house so it should make things simple.

Fuel prices are going to be the biggest factor for me as a lot of travel can be involved in remote areas, I may even need to go 4X4 for the winter months such as a commercial Discovery or Shogun.