Tax allowance on business equipment?

Tony1210

Hello. I recently bought a few tanning and massage beds to the value of £16,400. As they are for business use, am I right in thinking that I can claim tax allowance of 25% of this value?

£16,400 x 25% = £4,100 in year 1.

£3,075 in year 2?

I will also be buying a used van for the business, around the 3-4k mark. Again, this will be for business use only. Can I claim tax allowance at 25% for this value also?

£4,000 x 25% = £1,000 in year 1?

£750 in year 2?

Finally, what can I reclaim in deisel costs? As I am VAT registered, can I reclaim £1.49 of vat off £10 deisel? Or do I only claim a certain pence per mile?

TIA

dunstonh

I suggest you get an accountant to do your tax this year. You will have capital allowances and depreciation to take into account in addition to running costs. As you don't know what you can and cannot claim, you could do it yourself but you may find asking for an accountant to do the work saves you more. If you provide the information in an easy format, it shouldnt cost you much.

WHA

Firstly, the capital allowances are deducted from the business taxable profits, not from the tax bill. Your question wasn't really clear as to whether this is what you meant. Therefore capital allowances of say £10,000 will reduce your tax bill by say £1,900 assuming you are a company paying tax at 19% (again you didn't say whether you are a company or individual).

Secondly, you may be eligible for first year allowances of 40% if your business is "small" rather than the 25% writing down allowance you mention. In subsequent years you get 25% of the reducing balance.

Finally, as long as you do not put any private-use fuel in the van, then you can claim the input VAT at the full rate, assuming you have a valid VAT invoice for each purchase.

It seems that you are incurring fairly substantial expenditure and you may well miss a few tricks if you rely on this type of board instead of having an accountant. From your question alone, there are a number of other pertinent questions that you could have asked which may affect your tax position, which a brief consultation with a tax consultant may have uncovered. Unfortunately, all the possibilities are far beyond the scope of a discussion board like this.

Tony1210

Hello and thanks for the replies. I am a sole trader and vat registered. As I am a small business, I tend to do all the books myself regarding VAT and tax returns.