self employed van tax best way to claim for expenses

Mummy007

My Son is self employed cis registered, he has saved up £ 4,000 cash to buy a van just for work use.  I understand its 45p per mile so the mileage is easy taken off the mileage clock.  How does it calculate insurances as thats quite expensive  till he gets to 25 and repairs, tyres etc.   Thanks for any help

unholyangel

He doesn't. He can either claim actual costs or 45ppm. He can't claim both.

The 45ppm is to cover running/repair/wear and tear costs. The only thing it doesn't cover is parking/toll charges. 

Mummy007

Which is best actual costs or 45 ppm.   The insurance is £3000 is there any allowance for this

[Deleted User]

In that case he is probably better to claim actual costs as opposed to the mileage rate. He can claim for the whole cost of the van, repairs,fuel, insurance etc but must adjust such a claim to reflect any private use. Presumably he uses the cash basis?

Mummy007

Not claimed for van previously he used his brothers van.
So actual costs means saving receipts etc for fuel, repairs insurance its 100% just work use.

Pennywise

Not enough information.  The "best" way will depend on business mileage and ALL costs, i.e. fuel, road tax, repairs/servicing, breakdown cover, etc.

Mummy007

Van bought £ 4,000 cash  100% for business use approx mileage 12,000 
Insurance £ 3,000    year
AA            £ 59.00   year
Road tax  £ 25.00 month 
Repairs, tyres 
servicing  mot    £1,000 approx ? 
So which for above would be best to use actual costs or mileage.

Jeremy535897

He can claim the cost of the van plus say £4,359 a year running expenses, plus all the fuel, based on your figures, or 45p a mile up to 10,000 miles a year, and 25p thereafter. If he did 20,000 miles, and say the van does 40 mpg and fuel is £1.25 a litre (say £6.25 a gallon), he can claim actual costs of £4,359 plus fuel of about £3,000, totalling £7,359, plus an extra £4,000 for the cost in year 1 (less eventual sale proceeds in the year of sale), or £4,500 plus £2,500 in mileage. You can adjust for likely actual mileage, fuel cost and mpg.

[Deleted User]

So, for 12000 miles, using Jeremy’s figures, that’s 300 gallons - £1875 plus other running costs of £4359 - total 6234. There is the claim for the van at 4000 as a one off (to be reduced by any future sale price)

On the mileage option the claim is 5000 (10000 x 45p plus 2000 x 25p). 

Certainly, if it wasn’t for the high insurance, the mileage option would appear best year on year. You do,however, have to weigh up the additional relief in the first year for the actual purchase of the van. My gut feeling would be to claim actual costs. Perhaps, by the time the van needs replaced the insurance costs would substantially reduce and it can be revisited.

Jeremy535897

I missed the actual mileage estimate. My experience tells me claim the actual costs, including the cost of the van.

Mummy007

So actual costs would be saving van invoice on purchase, all fuel receipts, insurance costs, repairs, road tax and breakdown cover, tools receipts, clothing receipts just starting so want to do it correct from day one Thanks