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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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end of my tax year is 6th april, self employed,I have made

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end of my tax year is 6th april, self employed,I have made good profit this year, money in bank, have maybe £40,000 in plant / machinery/ stock,inc car 2005 Toyota landcruiser value £13,000 and 2007 van £1500,should I buy newer van (£10,000+)before year end,scrapping old one,what allowance is set against new van,£5000????,please advise
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

If you were to make a capital spend on a newer van,this being a commercial vehicle you would be able to claim 100% annual investment allowance.
So, if you were to spend £10,000, you could make a claim of 100% AIA (£10,000) against your profits.

If you were to scrap your old van and you have already claimed 100% allowance on it, then there may be a small balancing charge on it equivalent to the scrap value.

More information on capital allowances can be found here

https://www.gov.uk/capital-allowances/overview


I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

the Toyota was bought 4 years ago, I am sure I had an allowance on it for 1 year only, the van was bought december 2013 for cash, just a cheap van,but need something decent now for meeting clients, etc, if I was buying a van ,probably finance it to keep money in the company, maybe 50% down balance over a year, I do not have anything on finance,i have ok from finance company to go for it,,everything I have is paid for,£20,000 in black in bank,i have an overdraft facility but don't use it,dont owe anybody anything, old school way of doing things I suppose,suits me and my suppliers,well respected,

Expert:  taxadvisor.uk replied 2 years ago.
Alan, thank you for your reply.

You would be able to claim 100% AIA on the total cost of the van notwithstanding the fact you may put a down payment of only 50% of the cost and the rest is on finance.

As far as capital allowances claimed thus far on other assets, you should be able to work that out from your previous tax returns and/or from your accountant.

It is a pragmatic move to retain surplus funds for rainy days.

I hope this is helpful.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4884
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Expert:  taxadvisor.uk replied 2 years ago.
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