Hi Stu
A PCP is a Personal Contract Purchase and its a personal lease agreement.
See
http://www.askaprice.com/buyers-guides/personal-contract-purchase.aspHi Dave
You need to talk to your accountant about how such a lease would work for you.
Basically, the saleman will probably not know much, they never did when I was in commercial vehicle sales so can't see it's any different now.
You can claim your monthly payments and VAT on those payments as an expense, as well as your deposit. You can't claim the full purchase price of the van as it is not yours, it is owned by the leasing company. Most then decide what percentage is business use and the remainder being private use for taxation purposes. (Cars and vans are not treated the same with regard to taxation allowances.)
As with any lease, the estimated residual value is what's important and it's based on what the van is expected to be valued at when the contract ends. A van with 45k on a 3 year lease will be a lower value that a van with 36k on the clock on a 3 year lease so the monthly payments will be less as you are leasing the vans depreciation.
But one thing you have to be fully aware of is that you can't just hand the van back at the end of the lease if you don't want it. The van must be in a good condition with fair wear and tear considered. Any damage will be for your account to repair as is the case with any lease vehicle. If you have done a higher mileage than agreed, then the finance house will hammer you with additional leasing charges per extra mile. If you decide to purchase it then you already know what the price is and it doesn't matter what condition its in.
This is a very personal decision. Some people rent (lease) their TV's and never own them, but most of us buy them. Most of us will just laugh as the TV renter as an idiot for paying all that money for nothing. Renting a vehicle can be seen by some in the same light.
I would also suggest you read this as well - look at the disadvantages.
http://www.financeacar.co.uk/car-finance-options/personal-contract-purchaseUsing your example - "put £2500 down and pay £300 a month for three years. Pay another £4000 at the end and the van is mine, or hand it back and start again."
Your initial deposit and monthly payments are reflected on your profit and loss account as an expense (loss) as stated. If you decided to buy the van for £4000 at the end of the lease then you would be able to claim that as a capital gains allowance of 40% first year and then 25% on the reduced value each year thereafter.
If you financed the £4000 then other rules apply - you can claim the interest on the loan as well. I think there were changes to the capital allowance write off last year allowing you to claim the full amount one time. ( remember the tax man does not giveth, he always taketh, so any new tax options will probably benefit him rather than you in the long term)
Spruce