New van

hubbysaccountant

Hi, my husband took a loan to buy a van.  Do I add the whole £11,000 to his tax return for 2023/24?  How do I then log the loan repayments.  I use quickbooks.  thanks for the help.

Penguin_

Assuming its self assessment for self employed & not a limited company, you would simply deduct the monthly payments that fall into this financial year.

Jeremy535897

Did the van cost £11,000 or did he pay a deposit? Let me assume he paid a deposit of £1,000. I assume that he is not VAT registered, and is a sole trader not a limited company?
In Quickbooks you need to debit van (motor vehicles) £12,000 (in my example), credit bank £1,000 and credit HP account £11,000. The easiest way to do this is to post the £1,000 deposit to motor vehicles and then do a journal entry debit motor vehicles £11,000, credit HP account £11,000.
For tax, if you are using the cash basis, the whole cost of the van (£12,000 in my example) is treated as an expense, unless there is an element of private usage of the van, in which case you claim only the business proportion. If you use the accruals basis, you claim the business proportion as an annual investment allowance. If the amount claimed means his total taxable income falls below the personal allowance, restrict the claim.

hubbysaccountant

Hi, thanks for answering.  So I put the £11k on his tax return as a business expense for the year 23/24.  Then record the monthly payments as business expenses?

DullGreyGuy

hubbysaccountant said:

Hi, thanks for answering.  So I put the £11k on his tax return as a business expense for the year 23/24.  Then record the monthly payments as business expenses?

Not if he paid for it with the loan, in which case you only put the loan repayments for however long they last (guessing cash accounting)

TheSpectator

hubbysaccountant said:

Hi, thanks for answering.  So I put the £11k on his tax return as a business expense for the year 23/24.  Then record the monthly payments as business expenses?

Can we assume that despite your user name you are not an accountant?

Nomunnofun1

hubbysaccountant said:

Hi, thanks for answering.  So I put the £11k on his tax return as a business expense for the year 23/24.  Then record the monthly payments as business expenses?

You wish to claim both the cost of the van and the repayments on the loan to purchase it?

Jeremy535897

Nomunnofun1 said:

hubbysaccountant said:

Hi, thanks for answering.  So I put the £11k on his tax return as a business expense for the year 23/24.  Then record the monthly payments as business expenses?

You wish to claim both the cost of the van and the repayments on the loan to purchase it?

The repayments are just allocated to the loan (not HP, my mistake) account. You only claim the cost of the van. If it was an HP account, and you use the cash basis, you would claim tax relief on the repayments rather than the initial cost. So I think before you take any decisions, we need to know:
1. is your husband a sole trader or is the business in a limited company?
2. Is the van part private or wholly for business?
3. is the business registered for VAT?
4. Is the van financed by a bank loan or on HP?
5. Do you use the cash basis or accruals basis?

Dazed_and_C0nfused

All these sorts of problems will simply disappear once MTD for ITSA finally comes to life 🤣

Nearlyold

Nomunnofun1 said:

hubbysaccountant said:

Hi, thanks for answering.  So I put the £11k on his tax return as a business expense for the year 23/24.  Then record the monthly payments as business expenses?

You wish to claim both the cost of the van and the repayments on the loan to purchase it?

It would be good if you could, might as well go the whole hog & claim the depreciation as well. No disrespect to the OP but it did make me smile. Reminded me of the time a client got the idea that the mileage allowance of 45p a mile was what HMRC paid you