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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 16615
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am looking to start up as a freelance courier. and looking

Customer Question

I am looking to start up as a freelance courier. and looking to get a van. what would be tax deductible hiring/leasing/buying?
JA: Which tax year is the deduction for?
Customer: i haven't started yet so this year
JA: Anything else you want the Accountant to know before I connect you?
Customer: no
Submitted: 5 days ago.
Category: Tax
Expert:  TonyTax replied 5 days ago.

Hi. My name is Tony. I'm looking at your question now and will post my answer or ask for more information here in a short while.

Expert:  TonyTax replied 5 days ago.

If you buy a van you can claim capital allowances which reduce your profit for tax purposes. If you claim the Annual Investment Allowance you write off the whole cost of the van against one year's income but if you sell it there will probably be a clawback of some of the allowance claimed as you only get allowances equal to the net cost of the van (purchase price less sale proceeds). If you claim writing down allowances at 18% of the reducing cost annually you write off the cost of the van over a number of years.

 

If you hire or lease the van you can claim a deduction for the monthly hire or leasing costs including VAT unless you are VAT registered in which case you reclaim the VAT.

 

Whichever method of acquiring the van your claim should be reduced for any private use.

 

You would also claim a deduction for your fuel costs and any other running costs not covered by the hire or lease agreement.

 

I hope this helps but let me know if you have any further questions.