Self Employed Plumber..

aaron_223

Pub talk has led me to an interesting question for my Self Employment (whether this is the correcdt forum I don't know!!), apparantly if I lease my next van, I will effectivly get the van for free through my accounts.

Sounds too good to be true and my accountant said he's never heard of it and doesn't beleive it for a second. He's not qualified and I don;t expect him to be for my level or turnover (I work under CIS and therefore get refunds anyway).

Could anybody tell me what I've heard.. and what it means!!!

Would it actually be beneficial.

Cheers

tinktay84

All I can think is that the payments for your van get offset against takings which is what happens with mine.....
if you by a van you offset the cost but only a certain amoun per year based on depreciation

InsideInsurance

As you are leasing it then it is a RevEx and so the full amount is deductible - if you bought it then it is CapEx and so it is the depreciation that it deductible.

It is not "free" however it is just that you take it out your gross income rather than net. So if you make £60,000 after allowable expenses your take home would be approx:

£3980 a month

If you leased a van at £500 a month and all other elements stayed the same your take home becomes approx:

£3640 a month

tinktay84

thats a much beter way ofsaying i than Idid :-)

Elaine_Wilson

It is possible to get the van for nothing but it requires a particular set of circumstances - and leasing the van is not included.

You need to -

Purchase the van outright (by paying cash or on HP)

Be claiming working tax credit

Make the right amount of profit so that claiming 100% Annual Investment Allowance on the van will give you 41% extra tax credits on the whole cost, and

earn a profit in the next year at an amount that will fall under the disregard rules.

In ideal circumstances the tax relief (and extra tax credit payments) can total 102% of the cost of the van.

But very few businesses will actually be able to take advantage of this.