Can you deduct the cost of a works vehicle for tax purposes?

[mokane002]

As a sub contracter I purchased a van for work, £4300, can this be deducted from my earnings before I am assess for tax?

Thanks

[twix123]

It depends if you are classified as Self Employed for tax purposes

[factor-fiction]

Who is your employer- or are you self employed?

[mokane002]

I am self employed

[mokane002]

sorry - i am self employed and registered as such for tax purposes

[factor-fiction]

Well the HMRC site is a good starting point.
http://www.hmrc.gov.u...x/relief-self-emp.htm

[mokane002]

thanks - that confirms what i thought - that i can deduct it by my accountant is saying that i can't so i am not sure what to do - can't really afford to pay another accountant

[factor-fiction]

The HMRC site says:
Motoring expenses
You can deduct the cost of using your car for business purposes. There are two ways of working out how much you can deduct:

•a fixed rate for each mile travelled on business, using our fixed mileage rates
•the actual expenses, worked out using detailed records of business and private mileage to apportion your recorded expenditure

I can't see that you can deduct the purchase cost from your salary . Your accountant is probably right,
.
Ring HMRC if in doubt

[boxtops]

At one time, if you are a nurse, you used to be able to claim an allowance for shoes and stockings (sic), is this still the case?

[boxtops]

^ tax allowance, that is.

[buildersmate]

Factor and your accountant are correct.
You can offset the running costs of the vehicle against tax - and the running costs allowed will give you partial reimbursement for the depreciation of the vehicle (though not enough these days, when petrol have gone up so much and HMRC allowances haven;t).
But you cannot deduct the price of the vehicle in one lump.

[bednobs]

yes boxtops, tax allowance for shoes, tights and laundry for nurses

[Skyline D]

You can't directly deduct the cost of the van. It needs to be capitalised and included in a capital allowances calculation. However, as the first £50,000 of such capital expenditure is now allowed as a direct relief then unless you've previously spent over £46,000 on capital assets in the past year then yes you can deduct the cost. However, it does have to be claimed correctly as a capital allowances, not directly as an "expense".

This is a very rare case of buildersmate being incorrect! Ignore the nonsense about partial reimbursement of depreciation.

And nurses are allowed to claim an agreed £100 per annum against tax (so in effect £20 back) for the cost of special clothes in each year. They can't claim their actual expenditure.

[factor-fiction]

MM. Have you got a link for that, skyline? Yes a business can write off teh cost of a vehicle over 12 months and thereby claim full tax relief on the purchase cost in year 1. But I'm not sure that applies to an individual who is self employed. Certainly the HMRC suggests buidersmate and I were correct regarding self employed individuals

[Skyline D]

An individual who is self employed is by definition a "Business".

[factor-fiction]

Hi skyline- the rules look complicated but my interpretation of the rules set out on the business link site a car qualifies for a 100 per cent first-year allowance only if you buy a new, unused car that has CO2 emissions below 110g/km, I think it also has to be used exclusively for business.
http://www.businessli...3789933&r.t=RESOURCES

But I'm happy to be proved wrong if you have a link, skyline.

Regards

[Skyline D]

Whilst that's undoubtedly true, he didn't buy a car. The original post quite clearly says he bought a van. Vans are treated very differently for tax purposes. They treated like a piece of plant and equipment, not like a vehicle. He can write a van off 100% first year.

[Filbertfatknacke]

be cairfull i thought i could deduct the exspence of my van in one year, but i could nt , this became a problem when i estimated my earnings for tax credits, and then when i got my books back from the accountant found that the van was not included in that year(or not all of it), so i under etimate my earnings. so i now have to pay money back, to tax credits. so tools / vans are Assess and dont go fully off your tax that year...and if u claim tax credits get your books completed before July