Most Tax Efficient Way To Buy A Van For A Sole Trader

beetrootjuicer

Would be very grateful for any information regarding the most tax efficient way to buy a van for a non-VAT registered (and won't be for forseeable future) basic-rate tax paying sole trader. Would it be buying outright a secondhand van or lease hire or are there any other ways? Also any pitfalls to watch out for? Thanks in advance.

danrees

beetrootjuicer wrote: »

Would be very grateful for any information regarding the most tax efficient way to buy a van for a non-VAT registered (and won't be for forseeable future) basic-rate tax paying sole trader. Would it be buying outright a secondhand van or lease hire or are there any other ways? Also any pitfalls to watch out for? Thanks in advance.

In this situation the commercial aspects are likely to be the driving force.

If you purchased the van on a hire-purchase or finance lease contract then you should be able to claim capital allowances at 25% (reducing balance) each year.

Alternatively, if you hire the van on an operating lease you should get a tax deduction for any lease payments you make.

In addition, it should be irrelevant whether the van is second-hand or not.

alm721

Just wondered would this advice change if you are vat registered? (only asking cause we are and need to buy another van)
Thanks