Robbing Barstewards

[KenGMac]

FiremanT, hopefully yes.

As I posted, my Accountant told me that a "commercial vehicle" attracted the full, on-going 100 % relief as stated including finance costs to actually purchase the vehicle.

On the other hand if, as I did purchased a non-commercial vehicle, I can "only" claim for 10 % / per year on all costs including the cost of finance.

My accountant was pushing for me to go down the route of a commercial vehicle, however? it appears at first glance the purchase of a commercial vehicle is more tax efficient than hiring?

As posted??? has my accountant got it wrong???

Ken

 

[FiremanT]

I've been SE Sole Trader for five years now and have been constantly honest with my income declarations. Year on year my gross income has increased. This has transpired into a double edge sword now, HMRC Tax Bill week before Crimbo payable end of Jan £9300 with projected earnings bill payable in July of £4650 odd....FFS.
I've just about got £6900 as I put it by throughout the year, but it wipes out my business account. The fact I've shelled out £1000 for new contract van deposit and another £750 odd for alarm and deadlocks and more replacing broken tools I'm in an automatic deficit of about £2400, which doesnt come into play until the end of this tax year.
So now I need to find the 2.4k I've paid out already on business needs "probably credit card" to pay the tax bill, then pay that back thus I'm paying 2.4k twice, makes absolutely no bl**dy sense...and more over I can seriously see myself going on holiday a lot between now and the end of this tax year...curiously though, what have I done incorrectly to create this problem???

Re my earlier post regarding pooled expenditure, a quick google indicates things have changed slightly, or I was always on a misunderstnding (I think the former, but always wuilling ti be corrected). The "pool" only comes into force when you spend above the annual capital investment limit, currently £200K. Anything above that is pooled and qualifies for tax releif as I outlined.

Chippy: is the £1000 for the van a deosit, the VAT, or a combination.? Are you VAT registered?

Ken, I had not spotted that you were the author of an earlier post, but your last one gave me the impression that you may have understood that "100% TR" meant that if you spent £10K, on a van, that you would receive a tax saving of £10K. This is, of course, not the case - but I have been astonished over the years by the number of folk that have believed that is the truth

You Act. is correct - all capital expenditure on a van, and running costs, are subject to 100% TR, in the year in which the costs are incurred. Subject to the aforementione £200K capital limit

 

[HERTS P&D]

Ken is correct, a commercial vehicle is 100% tax deducted-able, including all costs that go with it.

Andy

 

[jono_h]

Chippy,

It'd be worth sticking a bit more into your tax pot after every job. Income Tax is only 20% - but there's National Insurance (8%?) to pay as well. And as someone else has said with a £10k tax bill you must be pretty close to the 40% Income Tax rate. So it's more a case of saving 35-40% of each job.

 

[mattylad]

And here I was thinking you guys all always had 2 sets of books? lol

 

[chirpychippy]

To try and answer some questions, the van is commercial only, used for work only "mostly"!! I'll check with my acc as I'm sure he said that I could only claim 85% of the monthly contract charges for the van as it is the HMRC belief that somewhere along the way I'll use it for social purposes..
The £1000 was a deposit/payment to secure the vehicle and reduce the monthly payments over the contractual period of 3 years. I am not VAT registered but closer than I would prefer to be, id rather stay out of the VAT bracket.

I've always believed "stupidly in hindsight" that putting 20% away would more than cover me, with all the expenditure, washing clothes, using home as an office etc etc etc would reduce my tax bill.

I have learnt from this though, I am going to put 33% away and closely really really closely monitor my income and in the future remember that the tax money is for tax and not for spending on luxuries "a side from the van"...

Live and learn......

 

[securespark]

Coming from my time as a multi-drop delivery driver, I would never say a commercial vehicle is a luxury. It is a tool of the trade, a necessity. If you're talking about a newer van with better comfort and safety features, these are not luxuries either. When you spend a lot of time driving, unloading, loading up etc... anything that helps these tasks goes some way to making your day easier.