[Dave Willis]

You guys who buy your vans on instalments - how does it affect your tax?
Keep your answers simple (I have the attention span of a goldfish).

I've always paid cash upfront, just wondered if there is any benefit to buy on the never never?

[nathankaye]

Probably wont help, sorry.
But if renting vans etc, its all taxable so dont know if its the same ??

[8weekly]

You count the whole price inc. VAT interest and offset the lot in year 1.

[Jonny 87]

It costs you more on the "never never" but then again you claim the whole lot as expenses, interest and all its warts.

It eases the sting a little bit, and overall drops the price by say 29% if your on the standard tax bracket. 

[Dave Willis]

Just on the first year?

So far I've had a super reliable van but the day will come to change. Everyone seems to drive about in new vans these days. Just thinking like 

[NWH]

If your accountant gives you the option put it all through as 1 purchase I've never claimed a % over 3-4 years ,it looks like your actually benifiting from it then IMO. You never know if it's costing you enough you might even get a tax rebate.

[SeanK]

To be honest for what you will get for the money sitting in an account you might as well pay cash, even if you pay an extra
£1500 on interest that's will save you roughly £440 on tax leaving you over a grand worse off.

[SeanK]

You count the whole price inc. VAT interest and offset the lot in year 1.

Cant do that as the interest isn't a set fee, in other words if you pay the loan off early you will get a discount on the interest
paid.

[8weekly]

You count the whole price inc. VAT interest and offset the lot in year 1.

Cant do that as the interest isn't a set fee, in other words if you pay the loan off early you will get a discount on the interest
paid.

I'll sack my accountant and ask you in future then as he told me about three weeks ago that that is what I should do. 

[AuRavelling79]

You count the whole price inc. VAT interest and offset the lot in year 1.

Cant do that as the interest isn't a set fee, in other words if you pay the loan off early you will get a discount on the interest
paid.

I'll sack my accountant and ask you in future then as he told me about three weeks ago that that is what I should do. 

I believe you can offset the cost of a van in year one but you don't have to. Your accountant may have given the correct advice for you in your financial situation.

When I bought my van in 2012 at about 16K it was advantageous for me to offset over two years or I would have brought my earnings after expenses below the tax threshold in year one and had no advantage from a proportion of the purchase. Without checking I think I offset a larger proportion in year one and the balance in year two.

The IR are very helpful and my wife asked them what we could do to use our allowances wisely but within the rules. I haven't checked what applies now but in general terms I think you can choose to put the whole lot through on year one or spread the cost over up to four years or possibly a mix of both.
 

[SeanK]

You count the whole price inc. VAT interest and offset the lot in year 1.

Cant do that as the interest isn't a set fee, in other words if you pay the loan off early you will get a discount on the interest
paid.

I'll sack my accountant and ask you in future then as he told me about three weeks ago that that is what I should do. 

No need to sack your accountant maybe just listen better to what he actually told you, like Gold has said you can offset the cost
of the van in year 1 but the interest will be offset over the lifetime of the loan.
Think about it, buy the van with say £3k of interest on the loan, claim for it and then clear the loan early saving the majority of owed interest for which you will have claimed tax back, doesn't sound legal to me.

[8weekly]

You count the whole price inc. VAT interest and offset the lot in year 1.

Cant do that as the interest isn't a set fee, in other words if you pay the loan off early you will get a discount on the interest
paid.

I'll sack my accountant and ask you in future then as he told me about three weeks ago that that is what I should do. 

No need to sack your accountant maybe just listen better to what he actually told you, like Gold has said you can offset the cost
of the van in year 1 but the interest will be offset over the lifetime of the loan.
Think about it, buy the van with say £3k of interest on the loan, claim for it and then clear the loan early saving the majority of owed interest for which you will have claimed tax back, doesn't sound legal to me.

That isn't what the accountant said and it isn't what Gold said.

[SeanK]

You count the whole price inc. VAT interest and offset the lot in year 1.

Cant do that as the interest isn't a set fee, in other words if you pay the loan off early you will get a discount on the interest
paid.

I'll sack my accountant and ask you in future then as he told me about three weeks ago that that is what I should do. 

No need to sack your accountant maybe just listen better to what he actually told you, like Gold has said you can offset the cost
of the van in year 1 but the interest will be offset over the lifetime of the loan.
Think about it, buy the van with say £3k of interest on the loan, claim for it and then clear the loan early saving the majority of owed interest for which you will have claimed tax back, doesn't sound legal to me.

That isn't what the accountant said and it isn't what Gold said.

So you can claim for interest that you might or might not pay ?

[8weekly]

You count the whole price inc. VAT interest and offset the lot in year 1.

Cant do that as the interest isn't a set fee, in other words if you pay the loan off early you will get a discount on the interest
paid.

I'll sack my accountant and ask you in future then as he told me about three weeks ago that that is what I should do. 

No need to sack your accountant maybe just listen better to what he actually told you, like Gold has said you can offset the cost
of the van in year 1 but the interest will be offset over the lifetime of the loan.
Think about it, buy the van with say £3k of interest on the loan, claim for it and then clear the loan early saving the majority of owed interest for which you will have claimed tax back, doesn't sound legal to me.

That isn't what the accountant said and it isn't what Gold said.

So you can claim for interest that you may or may not pay ?

The AIA can be claimed where there is a hire purchase (HP)
arrangement in place with intent of ownership. You do
not have to have paid in full for the plant or machinery to
claim the AIA. The allowances are given as though it was an
outright cash purchase and ownership is deemed from the
beginning, even though the installments are payable over
the term of the HP agreement. Tax relief is also available on
interest charged to the profit and loss account.

I will clarify with my accountant.

[SeanK]

You count the whole price inc. VAT interest and offset the lot in year 1.

Cant do that as the interest isn't a set fee, in other words if you pay the loan off early you will get a discount on the interest
paid.

I'll sack my accountant and ask you in future then as he told me about three weeks ago that that is what I should do. 

No need to sack your accountant maybe just listen better to what he actually told you, like Gold has said you can offset the cost
of the van in year 1 but the interest will be offset over the lifetime of the loan.
Think about it, buy the van with say £3k of interest on the loan, claim for it and then clear the loan early saving the majority of owed interest for which you will have claimed tax back, doesn't sound legal to me.

That isn't what the accountant said and it isn't what Gold said.

So you can claim for interest that you may or may not pay ?

The AIA can be claimed where there is a hire purchase (HP)
arrangement in place with intent of ownership. You do
not have to have paid in full for the plant or machinery to
claim the AIA. The allowances are given as though it was an
outright cash purchase and ownership is deemed from the
beginning, even though the installments are payable over
the term of the HP agreement. Tax relief is also available on
interest charged to the profit and loss account.

I will clarify with my accountant.

Its on the website, you cant claim for (HP) interest payments.

[8weekly]

You count the whole price inc. VAT interest and offset the lot in year 1.

Cant do that as the interest isn't a set fee, in other words if you pay the loan off early you will get a discount on the interest
paid.

I'll sack my accountant and ask you in future then as he told me about three weeks ago that that is what I should do. 

No need to sack your accountant maybe just listen better to what he actually told you, like Gold has said you can offset the cost
of the van in year 1 but the interest will be offset over the lifetime of the loan.
Think about it, buy the van with say £3k of interest on the loan, claim for it and then clear the loan early saving the majority of owed interest for which you will have claimed tax back, doesn't sound legal to me.

That isn't what the accountant said and it isn't what Gold said.

So you can claim for interest that you may or may not pay ?

The AIA can be claimed where there is a hire purchase (HP)
arrangement in place with intent of ownership. You do
not have to have paid in full for the plant or machinery to
claim the AIA. The allowances are given as though it was an
outright cash purchase and ownership is deemed from the
beginning, even though the installments are payable over
the term of the HP agreement. Tax relief is also available on
interest charged to the profit and loss account.

I will clarify with my accountant.

Its on the website, you cant claim for (HP) interest payments.

You can claim for interest, just not under the AIA is how I read it. It has to be under P&L. However, when I asked our accountant what I do with the cost of the new van for last year he said put the whole lot into the P&L spreadsheet (Aworka) as one item including the interest. Now it may be that he will do something else with the figures, but I understood from him that the whole lot including the interest could be offset against profits in year 1. Reading the bit I posted from the Lombard website seems to contradict that.  I will clarify when I speak to him. He's only just received our accounts.