Self-Employed Delivery Driver: Vehicle Expense Claim Help

fi5h1fishy

Hi everyone,

I'm a self-employed delivery driver in the UK, and I'm currently sorting out my taxes for the financial year that just ended (April 2023 - April 2024). I have a question about claiming expenses for a vehicle I purchased.

Here are the details:

• I bought a van two years ago when I first became self-employed for £12,000 with a loan.
• For the 2023 financial year, I only claimed the monthly loan payments of £312 as expenses instead of the total value of the van.
• For the 2023-2024 financial year, I made around £20,000 after expenses.
• As of March 2024, I am no longer self-employed and am planning to get rid of the vehicle.

My question is: Am I able to claim the remaining cost of the van on my latest self-assessment? If so, how should I go about doing this?

Any advice on the best way to handle this would be greatly appreciated!

Thanks in advance!

Phoenix72

You have already made a mess if 2022-23 by claiming the loan payments in full. You need an accountant, it will save you money in the long run.

Jeremy535897

Did you use the cash basis or accruals basis for your 2022/23 tax return?
Was there any private use of the van?

[Deleted User]

fi5h1fishy said:

Hi everyone,

I'm a self-employed delivery driver in the UK, and I'm currently sorting out my taxes for the financial year that just ended (April 2023 - April 2024). I have a question about claiming expenses for a vehicle I purchased.

Here are the details:

• I bought a van two years ago when I first became self-employed for £12,000 with a loan.
• For the 2023 financial year, I only claimed the monthly loan payments of £312 as expenses instead of the total value of the van.
• For the 2023-2024 financial year, I made around £20,000 after expenses.
• As of March 2024, I am no longer self-employed and am planning to get rid of the vehicle.

My question is: Am I able to claim the remaining cost of the van on my latest self-assessment? If so, how should I go about doing this?

Any advice on the best way to handle this would be greatly appreciated!

Thanks in advance!

Have to echo what Phoenix72 stated. 

The 2022/23 return is an incorrect submission. It needs to be amended before 31st January - hopefully HMRC will not have opened an enquiry before then. DO NOT submit the return for 2023/24 before doing this! 

Loan repayments are not an allowable expense- the interest is. The full cost of the van should have been claimed in 2022/23 - less any private use adjustment. 

You also need to be in a position to answer the questions posed by Jeremy. 

Jeremy535897

[Deleted User] said:

fi5h1fishy said:

Hi everyone,

I'm a self-employed delivery driver in the UK, and I'm currently sorting out my taxes for the financial year that just ended (April 2023 - April 2024). I have a question about claiming expenses for a vehicle I purchased.

Here are the details:

• I bought a van two years ago when I first became self-employed for £12,000 with a loan.
• For the 2023 financial year, I only claimed the monthly loan payments of £312 as expenses instead of the total value of the van.
• For the 2023-2024 financial year, I made around £20,000 after expenses.
• As of March 2024, I am no longer self-employed and am planning to get rid of the vehicle.

My question is: Am I able to claim the remaining cost of the van on my latest self-assessment? If so, how should I go about doing this?

Any advice on the best way to handle this would be greatly appreciated!

Thanks in advance!

Have to echo what Phoenix72 stated. 

The 2022/23 return is an incorrect submission. It needs to be amended before 31st January - hopefully HMRC will not have opened an enquiry before then. DO NOT submit the return for 2023/24 before doing this! 

Loan repayments are not an allowable expense- the interest is. The full cost of the van should have been claimed in 2022/23 - less any private use adjustment. 

You also need to be in a position to answer the questions posed by Jeremy. 

If you use the cash basis, you claim the payments on an HP agreement as you make them, which is why I asked. I don't think there's a hard and fast rule for a loan, and of course there is the finance restriction to look at. This is why I asked the question.

fi5h1fishy

Jeremy535897 said:

Did you use the cash basis or accruals basis for your 2022/23 tax return?
Was there any private use of the van?

Appreciate all the help so far.

In all honestly I should have just got an accountant instead of filing it by myself. I’m unsure on which basis I used; I just filled out all my profits in quick books and any expenses I believed were reasonable such as the van loan payments, insurance, fuel etc. I claimed as an expense. 

I was informed by a load of other drivers I worked with that I could claim the monthly loan payments as an expense and I definitely recall reading online (perhaps on the taxscouts website) at the time of filing 2022-2023 return that it was okay to do so, but I get that not everything on the internet is true and I should have got an accountant.

So from what I can gather, I’ve completely ballsed up my previous tax return for 2022-2023 so I would really appreciate some advice on where to go from here. I would also be grateful if someone could inform me of the best way to claim this van as an expense; just a reminder a purchased it through a loan for 12k so would be fantastic if I could get some of this money back!

Many thanks!

fi5h1fishy

Also I didn’t use the van for private use 🙂

[Deleted User]

fi5h1fishy said:

Also I didn’t use the van for private use 🙂

Woukd you be confident that you would amend the 2022/23 return and complete the 2023/24 return correctly? If not I would engage an accountant immediately. 

Their fees are tax deductible and there is a reasonable chance that there are other claims of which you may not be aware. 

The assurance that the return would be completed correctly is surely worth paying for! You may also save money in the long run!

fi5h1fishy

[Deleted User] said:

fi5h1fishy said:

Also I didn’t use the van for private use 🙂

Woukd you be confident that you would amend the 2022/23 return and complete the 2023/24 return correctly? If not I would engage an accountant immediately. 

Their fees are tax deductible and there is a reasonable chance that there are other claims of which you may not be aware. 

The assurance that the return would be completed correctly is surely worth paying for! You may also save money in the long run!

Think I’ll most definitely get an accountant to sort this mess for me.

I have got a question though, I’ve been reading up on capital allowances. Would I be able to claim the value of the van when purchased (£12k) as a capital allowance? 

I only made around £14k of profit 2022-2023 so is there potential to claim the van as a capital allowance on this years tax return even though the vehicle was purchased in the previous tax year if that makes sense?

Once again appreciate all the help! 

[Deleted User]

fi5h1fishy said:

[Deleted User] said:

fi5h1fishy said:

Also I didn’t use the van for private use 🙂

Woukd you be confident that you would amend the 2022/23 return and complete the 2023/24 return correctly? If not I would engage an accountant immediately. 

Their fees are tax deductible and there is a reasonable chance that there are other claims of which you may not be aware. 

The assurance that the return would be completed correctly is surely worth paying for! You may also save money in the long run!

Think I’ll most definitely get an accountant to sort this mess for me.

I have got a question though, I’ve been reading up on capital allowances. Would I be able to claim the value of the van when purchased (£12k) as a capital allowance? 

I only made around £14k of profit 2022-2023 so is there potential to claim the van as a capital allowance on this years tax return even though the vehicle was purchased in the previous tax year if that makes sense?

Once again appreciate all the help! 

Without getting into whether or whether not you use the cash basis it would make no sense to claim the full cost of the van against £14000 profit. Is this before or after you have claimed the van loan repayments?

All can be sorted out very easily by an accountant.

Jeremy535897

If you use the accruals basis, in year one (2022/23) you can claim any amount up to the full cost of the van, but in practice you would limit the claim to the excess of profit over the personal allowance (or the class 4 level if you don't mind using capital allowances to save 9.73%). In year 2 you can only claim 18% of the remaining balance.
Unfortunately, though, you say you ceased to trade in March 2024, and even though you haven't sold the van, you have to treat it as disposed of at market value at the date you ceased to trade. That may create a balancing charge.
It will be very easy for an accountant to calculate the best figures to use, and whether cash basis or accruals basis makes a difference.