Cost of van for SA

cocobean12

hi forumites

I've tried to research this and tbh HMRC website has confused me more than helped me!

Basically my DH is a sole trading SE builder for several years, his work van has just failed its MOT miserably and he needs to get a new one this week, when I say new, I mean second hand, its only used locally so a cheapish one for around £2500 will do fine.

So assuming it will be within the 2012-2013 tax year (accounts run April, to April), do I put this down as a capital expense and claim tax relief on the whole £2500 or does it have to be done in percentages each year? I've seen a limit of £25000 for plant and machinery but I'm really not sure about how to enter it on the SA form.

By the way, its solely used for business purposes and we have a car fr personal use

If someone could help me I would be eternally grateful. I've tried to find the answe in the HMRC website but it didn't really help!

nomunnofun

He can claim the whole cost as capital Allowances in the first year..





http://www.hmrc.gov.uk/capital-allowances/plant.htm#3

cocobean12

Thanks, its not his first year, he's been SE for over ten years.

This is where I was getting confused I think.

nomunnofun

cocobean12 wrote: »

Thanks, its not his first year, he's been SE for over ten years.

This is where I was getting confused I think.

I may have confused you and altered my post. The full cost of the van can be claimed in the first year, 2012/13 in your case.

cosyc

This may also help

Free session run by HMRC, with staff on hand to answer your questions

Capital allowances for the self-employed

http://www.hmrc.gov.uk/webinars/self-employed.htm

nomunnofun

cosyc - I think that you need to delete a few of those 'http's

cocobean12

Ah thank you, I see what you mean now about first year (not first year trading), but first year of ownership of the vehicle.

Thank you all for clarifying for me!

zygurat789

Although you may claim a 100% allowance for the van, you don't have to; for instance if your taxable income was less than £10,605 you could restrict your claim this year and carry the balance forward to next year.

cocobean12

Thank you, What is the figure of £10605 made up from, or is it just an example? Profit after expenses won't be huge, probably around £16k, so in this case would it be possible to carry over half of the van cost to 2013-2014 or am I just over complicating things?

zygurat789

8105+2500=10605 lowest taxable income when you should claim the 100% allowance.
It always used to be possible to restrict a claim ie only claim a % of the allowance and claim the balance in subsequent years.
At 16K taxable it looks ok to claim the whole amount, so long as there's nothing else.

ioscorpio

Or would it work out better for him to claim the 45p per mile allowance?