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Van purchase for sole trader

13/05/2019 08:04:21
Hi,
I am a sole trader and I bought a new van in 2016/2017 for the amount of £18000. My accountant recorded this as a capital allowance for that year, it is used solely for the business.
I have changed my accountant recently and she wants to record depreciation for the van, which to me doesn’t make sense as it increases my tax bill (a depreciation I thought helps getting a tax relief, and also I thought that depreciation should only be recorded if the whole amount could not be claimed in the year of purchase).
I am using cash basis.
Could you please tell me if what she wants to do is right and mandatory?
Regards, A
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Re:Van purchase for sole trader

13/05/2019 10:58:24
Hi

You cannot claim for Capital Allowances if you are using the Cash Basis for the van. You can however claim for a car. If you have purchased a new van and using the cash basis then you will need to claim this as an expense. If you are not using Cash Basis and using the Traditional Accounting then you would be able to claim the Annual Investment Allowance for the van. Did your previous accountant use the Capital Allowance method for the van during the year 2016/17 or claimed the full 100% under Annual Investment Allowance? Please refer to the following links:
BIM 70015
CAM 23081
capital-allowances-and-balancing-charges-hs252-self-assessment-helpsheet
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Re:Van purchase for sole trader

13/05/2019 12:40:16
Hi,
I'm a sole trader. In Feb 2018 I bought a van (£1000).
My previous accountant prepared my Self Assessment (2017/1 and didn't claim it. Now, I'd like to do Self Assessment myself (2018/19).
Am I allowed to claim this van now? I use cash basis method.
Thank you in advance
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Re:Van purchase for sole trader

13/05/2019 13:56:33
Hi

You cannot claim Capital Allowances if you are using Cash Basis for anything except cars. You will need to claim for the van as a expense and you can do this by amending the 2017/18 SA Return. Please refer to the following links
HS 2522

BIM70010

SA Tax Return corrections


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