[TomSE]

Hi fellas, I am currently registered a self employed and am looking at taking out a personal loan to fund purchasing a larger van. As this will be used for business am I able to claim the money I'm paying back each month as an expense, and also what would be the implications if I was to become a limited company during the loan period, could I still claim the monthly loan repayment as an expense, even though the loan is in my name rather than the companies?

Thanks, Tom

[ben M]

ask your accountant

[PoleKing]

Ben has a point.

When you apply for the loan, they will decline it if it is stated to be for business.
If you intend to spend the money on a personal cause, you will just be credit scored.

[stuart mc]

Ben has a point.

When you apply for the loan, they will decline it if it is stated to be for business.
If you intend to spend the money on a personal cause, you will just be credit scored.

what pish, take the loan and claim it, doesn't matter how you get it, as long as you can prove it was spent on your business

[PoleKing]

Ben has a point.

When you apply for the loan, they will decline it if it is stated to be for business.
If you intend to spend the money on a personal cause, you will just be credit scored.

what pish, take the loan and claim it, doesn't matter how you get it, as long as you can prove it was spent on your business

That's not what I'm saying.
I'm saying if you go to the bank and ask for a personal loan to fund a business they will decline it.
And refer you to business.
It is much harder to get a business loan than a personal.

[stuart mc]

Ben has a point.

When you apply for the loan, they will decline it if it is stated to be for business.
If you intend to spend the money on a personal cause, you will just be credit scored.

what pish, take the loan and claim it, doesn't matter how you get it, as long as you can prove it was spent on your business

That's not what I'm saying.
I'm saying if you go to the bank and ask for a personal loan to fund a business they will decline it.
And refer you to business.
It is much harder to get a business loan than a personal.

maybe so, but that was not what the OP asked

[Smudger]

I'm with stu on this, if it's for business then it's an expense,  the bank may not look kindly on the fact you failed to declare what it was for.

If you become ltd and the van is on finance to you then the limited company needs to a. Buy the vehicle off you ( pay the loan in full ) or b. lease from you at £££ per month until the loan is paid either way it's a biz expense and can be claimed for.

Insurance may be problematic as to who owns the van until it's paid for

Darran

[PoleKing]

Ben has a point.

When you apply for the loan, they will decline it if it is stated to be for business.
If you intend to spend the money on a personal cause, you will just be credit scored.

what pish, take the loan and claim it, doesn't matter how you get it, as long as you can prove it was spent on your business

That's not what I'm saying.
I'm saying if you go to the bank and ask for a personal loan to fund a business they will decline it.
And refer you to business.
It is much harder to get a business loan than a personal.

maybe so, but that was not what the OP asked

No. But I felt the information was pertinent to the question as it doesn't matter what he can claim if he doesn't get the money because the bank won't give him a personal loan as it will be spent on business.
Sometimes we don't know what we don't know.

[TomSE]

Cheers for all the advice fellas, I will check with an accountant before I go ahead.

My thoughts are that I am using the loan to buy a vehicle, I am self employed at this moment so in my mind it wouldn't be a business loan as such as it is not in a business name? Also I will be buying the vehicle outright with the money from the loan, so no financing of the vehicle, so perhaps I will be better off just claiming the purchase of the van itself as a one off lump sum expense, rather than an ongoing monthly expense of the loan itself?

 

[Mike #1]

You can claim for the the total capital expenditure or purchase price of van say £10,000 , then after that you can claim the interest on the monthly  loan repayments .

But as above approach the bank in the right manner for the loan , In my case i have an L200 and took out a personal loan from the bank but it has personal use as well

And a Truck has five seats and in general  loads of people dont use them for business you go to Bank and say you are buying a van then they will ask what for straight away and your job and know straight away  it is for your business . Mike

[8weekly]

ask your accountant

Helpful.

[Total shine cleaning services]

if you go ltd you're allowed a certain amount of time before you incorporate as setting up costs, I went ltd 3 months after starting up and all of the receipts were put through by my accountant.

Graham

[rosskesava]

Ben has a point.

When you apply for the loan, they will decline it if it is stated to be for business.
If you intend to spend the money on a personal cause, you will just be credit scored.

what pish, take the loan and claim it, doesn't matter how you get it, as long as you can prove it was spent on your business

+1

Get a loan any way you can but never mention it's for business or to do with work. Say it's for a new kitchen a new this or a new that. You can even say it's for a new family car or what ever.

Forget the accountant and forget the Ltd stuff.

Then when doing your accounts, add it as a business expense. Speak to the tax man as for the best way to claim the expense. Contrary to popular belief, they are actually very helpfull.

[dave0123]

AS a sole trader on proper yearly accounts... if you bring cash into the business eg.. if you put the loan money into your business account after its been put into your personal account.. is then put down on your business accounts as "capital introduced"  (on your balance sheet) you can then just buy your van etc...you won't be able to claim your loan payments on your tax return I don't think, only the interest

This makes no different to your year end return as its as simple as turnover/less expenses = profit then tax. You obviously claim the amount of the van as usual.

[Ian101]

AS a sole trader on proper yearly accounts... if you bring cash into the business eg.. if you put the loan money into your business account after its been put into your personal account.. is then put down on your business accounts as "capital introduced"  (on your balance sheet) you can then just buy your van etc...you won't be able to claim your loan payments on your tax return I don't think, only the interest

This makes no different to your year end return as its as simple as turnover/less expenses = profit then tax. You obviously claim the amount of the van as usual.

correct ref the claiming ... you can claim the £10000 either in one go or over 5 years on a reducing balance and the interest only element of the loan as if you claim the whole repayment as well as the van (either in one go or over 5 years) then you would be claiming twice ............ nice but not possible 

[dd]

I took out a personal loan to buy a brand new van - pretty much 100% business use - and the bank did not make any issue out of it at all. All they were concerned about was my ability to repay.

I borrowed 10k over 5 years.

As far as tax is concerned I claim a mileage allowance (45p/mile) and the interest payments were set against my tax bill.

All paid now and still have van which is now 8 years old and as yet never let me down.

[AuRavelling79]

I took out a personal loan to buy a brand new van - pretty much 100% business use - and the bank did not make any issue out of it at all. All they were concerned about was my ability to repay.

I borrowed 10k over 5 years.

As far as tax is concerned I claim a mileage allowance (45p/mile) and the interest payments were set against my tax bill.

All paid now and still have van which is now 8 years old and as yet never let me down.

Almost ditto that except they said if I was going to pay it off in a year or so I could have a business overdraft at a lower rate of interest.

Perhaps it's because I have a business current account?