Vans - what is tax deductible?

Cam93

Hi, I'm doing research on going SE which would involve purchasing a van to be a CIS worker which basically means I pay tax at source.

I've heard multiply conflicting information about what is deductible and what isn't.

So as far as I'm aware you can claim up to 45p per mile upto 10000 miles (4.5k total PA) for using your own van too and from work. This is fine I understand this part.

However I've heard if I get a contract hire van at say 300pcm then the whole 300pcm is tax deductible which would be 3.6k per year total - this essentially would mean the van costs me nothing other than maintenance surkey this can't be true? 

What are the rules for different ways of owning a van? Is it best to buy outright, PCP, finance? Contract hire? 

Thanks In advance 

[Deleted User]

You appear to believe that your tax bill will reduce by £3600 which is far from correct. You will receive tax relief (it is tax deductible) on £3600. So, if you are a basic rate tax payer your tax will reduce by 20% of £3600 - £720.  

Similarly - on the mileage example - your tax liability will reduce by 20% of £4500 - £900.

Jeremy535897

The best way to buy the van from a tax point of view depends on your annual profits, how much the van is used for business, whether you use the cash basis, and other factors. If you buy a van outright, or on a hire purchase contract (as defined for tax law), you might be able to claim the business element of the whole of the cost of the van in the year you buy it. It would be best to ask an accountant.

unholyangel

Bear in mind you can claim actual costs or the 45ppm, not both. 

Including this due to your statement about only being liable for the maintenance. The 45ppm is designed to cover everything, purchase running and maintenance costs. 

And you need to continue claiming on the same basis (cannot switch between the two) unless you were getting a new vehicle.