When it comes to vans I would by something that's costing you 300 odd a month again it keeps the tax down as its all written off against turnover as long as you have another vehicle otherwise they'll hit you again with knocking another 25-50% tax
Again totally wrong if you want to save the most on tax then don't buy a van instead rent it or lease it, that said it still wouldn't mean its the best the best way to end up with the most money in your pocket after tax which is what all sensible self employed/ business
persons should be aiming for.
At the end of the day in my experience the outgoing costs in this business vary from trading year to trading year.
Some years you will be spending a lot other years not so much.
So in my opinion it's difficult to pin the figure as a definite for a monthly or yearly cost to be set in stone.
This type of business doesn't have expensive asset collateral to add value so it is reliable on profit after turnover to be financially successful.
None of the information provided by SeanK or NWH takes this into account and a lot of what has been said is nonsense in my opinion.
Highlight what you think is nonsense yes outgoing costs will vary from year to year as will they differ when it comes to
comparing one persons to another which has already been explained above.
When starting a business plan you need to know A How much do I need to fork out before I earn my first penny B How much of
a cash reserve/flow will I need to keep me going over the first few years until I get established and C how much is my
business going to cost me yearly to run.
Now as with all these posts you can only give out advice on the how to work this out or what it might cost if the person is in a similar position as yourself but only the op will know what its going to cost or what he will need to spend.
What you said about a new van shouldn't cost you more than £1500 in a year was a load of baloney!
Those figures don't stack up.
Unbelievable, Buy a van for £15k keep for 5 years then sell it for £7500 how much did it cost you per year ? ok if you
want to get picky you could go into things like interest on the money if you hadn't bought the van or that it might be worth
a few quid less in 5 years but its not hard to get the general meaning of the post.
SeanK look the way you are going about the accounting is all wrong.
What you are doing in your example is 15k - 7.5k = 7.5k then 7.5k /5= 1.5k annually
You are taking the figure and dividing it by 5 to get an average per year.
But that's not how we do our accounts for the Tax Man is it?
As I explained earlier you either put the whole lot through your accounts in one go (AIA) or over several years (Capital Allowance) so the percentage you offset makes the yearly expense variable.
Off the top of my head the Capital Allowance deduction is 18-20% (can't remember exactly at the moment) of the initial purchase price for the first year, then 18% of the remaining value deducted year on year for several years.
Hence your monthly or yearly cost of running your business is variable due to the fluctuating cost of your business expenses.
Can you understand that now?