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Buying a van on hire purchase

09/05/2019 14:19:30
If I buy a van from a garage on a hire purchase, For example £1000 upfront fee, £250 per month for 48 months and then a £1000 fee at the end, can I put each of these payments into my expenses? The vehicle will be solely business use, can I claim it's total cost against my income/taxable profits in my self assessment?
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Re:Buying a van on hire purchase

10/05/2019 08:23:22
Hi.
Where the van is used solely for business use you can claim the full costs of this. The method for doing so would depend upon the hire purchase agreement you have and the accounting method you use (traditional or cash basis). Where you are using the cash basis then you would simply claim as an expense the amount paid out in the course of the tax year. If your agreement includes interest, you will be limited to a maximum of £500 interest claim per year. If you are using the traditional method of accounting then please see this page in the business income manual which explains in more detail how to claim the cost of the van depending upon the circumstances.

BIM 45351


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Buying a van on hire purchase

10/05/2019 14:02:24
You can claim the cost of the van against your income in its entirety if it is a commercial vehicle with a pay load of over a ton. Only the finance interest element of the payments are claimable. If it is not a commercial vehicle with a payload of a ton, you write it down at 18% on a reducing balance each year.

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