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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4348
Experience:  FCCA FCMA CGMA ACIS
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My enquiry is realated to purchasing a van I am self

Customer Question

My enquiry is realated to purchasing a van I am self employed
Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: Okay 2015-16 tax year. I was paying the 3rd and final year of lease payments. At the end I paid a £7000.00 balloon payment to make it mine to sell. Received £10000 for it in a private sale . I then bought a new van outright for £17000. What is deductible what do I declare??.
Assistant: Is there anything else important you think the Accountant should know?
Customer: No I don't think so
Submitted: 10 months ago.
Category: Tax
Expert:  bigduckontax replied 10 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

This is a Capital Allowance item. In the year in which you acquired the van you would be entitled to an Annual Investment Allowance (AIA) of the full price of the van. Unfortunately your question is silent as the the overall cost of the van. On sale there would be a Balancing Charge of 10K. Buying a new van for 17K would generate an AIA of 17K to offset tax in the year of purchase. You would declare both the purchase and the sale on the SA103.

I do hope that you have found my reply of assistance.

Customer: replied 10 months ago.
Ojay I ge thatI had been paying approx. £220.00 pcm for three years and a big deposit up front as this was a leasehold purchase. I was setting off these payments during each of the tax years these payments were made. At the end of the agreement I had the option of paying a balloon payment of £7000.00 to allow me to sell it independently which of course I did. Can and how do I set off this payment of £7000.00 against my tax. I understand that the £10000 received in the vehicle's sale must be declared.
Customer: replied 10 months ago.
Is that £44.00 in addition to the £36.00 already paid. Or do I just pay the difference??
Customer: replied 10 months ago.
What is the present VAT threshold for small businesses please?
Expert:  bigduckontax replied 10 months ago.

VAT Threshold is 83K turnover in any one year. There is no small business threshold, it is the same for everyone.

You have been incorrectly claiming for the van outside the Capital Allowance system. You have a gret deal of unscrambling to do to correct prior year incorrect returns.

Customer: replied 10 months ago.
I WAS ADVISED THAT I COULD CLAIM MY MONTHLY LEASEHOLD PAYMENTS SO I NEVER QUESTIONED IT TO BE HONEST. I CERTAINLY NEVER SET OFF ANY COSTS OF THE LEASEHOLD VAN AS A CAPITAL ALLOWNANCE MORE AS A RUNNING EXPENSE MY QUESTION ABOUT THE CHARGE OF £44.00 FOR A PHONE CHAT WAS NOT ANSWERED. THANKS
Expert:  bigduckontax replied 10 months ago.

I have received no offer of a phone call so the charge for that will not kick in unless I receive and accept it.

It is unfortunate that you received such ill advised advice in the past. There will my a great deal of un-scrambling to be done to put this matter right.

Customer: replied 10 months ago.
sorry NOT BEEN PICKY BUT IS THE ADVERTISED COST OF £44.00 IN ADDITION TO THE £36.00 PAID OR IS THE DIFFERENCE (I.E £8.00) CHARGED ONLY. THANKS
Expert:  bigduckontax replied 10 months ago.

Should a telephone call be accepted it would be an additional GBP 44 charge.

Customer: replied 10 months ago.
okay busy NOW SO WILL PROBABLY RING TOMORROW. DOES THAT SUIT
Expert:  bigduckontax replied 10 months ago.

I personally cannot accept your telephone request as I am temporarily operating from a time zone 7 hours ahead of the UK.