Capital Allowance for a van.

Tek4051

I am considering investing in a new van for my business.

I am a sole trader working as a courier.

Currently I anticipate having a small tax liability for my personal income for the tax year 2012/2013.

If I buy a new van now, for approx £20,000 I assume I can count that against my tax for this year. However, my tax liability for this year will be nowhere near £20,000. So I am concerned that I may lose a lot of the benefit.

Can I use some of the Capital Allowance this year and the rest next year?

Thanks

Pennywise

Tek4051 wrote: »

Can I use some of the Capital Allowance this year and the rest next year?Thanks

No, the capital allowance rules aren't that flexible.

You can certainly reduce your claim for the year of purchase by disclaiming some of your annual investment allowance, but the balance remaining can only then be claimed at 18% per year on the reducing balance method for following years.

So if you wanted to claim only £10k of the cost, that's fine, but in year two, you could only claim 18% of the remainder, so £1.8k, then year three it would be £1.5k then year four would be £1.2k etc. That pattern would repeat each year until you sold the van.

nomunnofun

As pennywise is much quicker at typing than I and I have, therefore, deleted most of my posting, it only remains for me to suggest that there would seem to be little option but to defer the purchase until after your year end.

niftythrifty1

Speak to an accountant but im pretty sure youll get a large tax rebate.

So a few thousand to you i presume but ask an accountant they will tell you exactly.

im sure i got loads of money one year for putting my van through the books