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As above really. Due to redundancy I'm going it alone and was wondering if I buy a van and all the tools I need for my future choice of employment, can I then take off the cost of these from my first tax bill? If so, how does that work, and how much do you get to claim back? Many thanks.
Van is not so simple, everything else you can - plus put stuff you own already into the business.
Van is not so simple
I think its simpler than it used to be, still listed as capital on your tax return but unless you've splashed out about £50k (from shakey memory) you don't have to do that tax-rebate-in-little-annual-chunks-and carrying-over-the balance ball ache. Unless like me you bought your van just before that was phased out and still have to do the ball ache admin every year for an ever more trivial sum.
Cars I think can stillbe a pain, unless they fall under certain eco-encouragements but vans I [u]think[/u] you can claim the full value of in your first return.
get an accountant to do your tax return, it'll save you a fortune.
Lease it and then claim the full lease cost - thats what my mate does anyway. Presumably there is a tax efficent reason rather than just buying the van.
You may be right about getting an accountant. I have a feeling it'd be worth it in the long run.
Ewan - Member
Lease it and then claim the full lease cost - thats what my mate does anyway. Presumably there is a tax efficent reason rather than just buying the van.
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With regards VAT, you can only claim back 50% on the lease, 100% on maintenance. Full amount tax deductable if self employed. If you set up as a ltd company it becomes a taxable benefit in kind.
And if doing your own books, look at something like www.freeagent.co.uk to manage invoicing etc.
You need to learn about capital allowances and get an accountant, they usually save you more than they cost.
Your van and tools are capital expenditure and you claim capital allowances against these at HMRC rates. You have an annual investment allowance which is currently £25k which you can use and capital allowances on any capital expenditure remaining. You can claim all the cost (less VAT if your registered). Road tax, loan interest and running would go against your profits.
If you need any further help email me
You guys are a fountain of knowledge. Thanks to you all.
+1 to accountant. Honestly, a decent one will save you what they charge.
With my vehicles I'm allowed 25% capital allowance a year. Say my car is worth £10,000 I deduct £2,500 less 5% personal use £125 , so my allowance is £2,375. The next year my car is valued ar £7,500 and the 25% etc is applied to that. Aftet x numbet of years my car might have a value of say £3,000 . But realy its worthless so I scrap it and get £300 for it. I can deduct £2700 from tax bill for that year.
If I buy a tool to do a specific job maybe £20 I just put it down as an expense. But I have a feeling if you filled a van up with stuff, it probably would be a capital expense and youd be allowed a percentage of the value every year.
As said though an accountant especially for your first year is a good idea. Once your clued up a bit you could always file you tax returns yourself.
Get an accountant
craigxxl is the same advise my accountant gives.. i can nominally spend about 10k a year on new tools/ capital and its tax deductable.. so go on fill the van..
spending loaqds of money on stuff is nt always best. rather than spend 400 quid each on bosch sds drills i bought 3 at 59 quid each from screwfix ( 2 year warranty) the first died last year after 5 years sterling daily work..
stuff like screwdrivers though buy the best,, they wear very quickly,, keep everything clean and serviced ( wish i could live up to that)
and have fun being self employed is the best job ever
Depending on what job you do, you can fleet hire tools from Hilti, may be an idea if you are just starting up. Also talk to an accountant about which way to claim your tax, if its an old van you will be better claiming so much per mile travelled rather than putting receipts in, think it works 30000 miles is the same as putting £10,000 of receipts in.
This also works with lodge, there is a set rate you can claim per night, if you stay in places which are usually cheaper (think the rates about £50 per night)you are better claiming for the amount of nights you spend away rather than putting the receipts in. Not sure if this is clear?
Ask a few accountants there rates as well, there can be a big difference!
Road tax
What is this road tax of which you speak?
/pedantry