Hi-just wondered if anyone had any experience of lease vans. I was told a while ago by a lease van company that all the monthly payments made could be claimed back on tax however wanted to look into it a bit more to check the truth of this. Haven’t really got much in the way of answers from the tax office or accountant who seems to think hp is the better way to go. I know that some companies put a limit on how many miles you do per year and also you have to be careful of any damage done should you want to trade it in after 3 years.

Is it something that anyone would recommend doing or not, can you explain the rules as to claiming back tax and any info on this would be really useful.

LoveMyBikesLadyLurker

A lease is rental so the payment is treated the same way any costs are against your business. 100% tax deducable.

If you HP a van then at the moment you get 100% tax allowance on the first £70k or so (Not sure of exact figures). This is great as long as you actually have a tax bill big enough to use it. You also get tax relief on the interest charges on both finances.

Which one suits you is not simply down to which is most tax efficient (Not much in it). If i was an accountant i would be explaining to you how ownership or leasing would effect your balance sheet and gearing ratios and how cash flow for the next few years may be more important than owning a vehicle. Another way of thinking is also that money invested in your business rather than a vehicle can earn you more.

What i am trying to say is i would question my accountant a bit further than him simply saying he prefers HP. A lot of accountants dont really pay much attention to vehicle finance

Thanks TLH (did you say gearing ratios 8O), currently thinking about updating the old van but not sure if lease companies are a good way to go and you are right the accountant doesn’t seem to know much about it either. Could only afford the lease payments if I could guarantee that money would not be needed for the tax bill at the end of the year.

I would suggest if your that tight for the payments then you might want to think again. What happens if you get a down turn in work, injure yourself etc – payments still have to be made. Also don’t forget that if your company owns it and you use it for personal use as well then you’re liable to personal tax on the benefit.

Your right Steve but the downside of self employment is that you never know these things so have to take a leap of faith now and again! Our business have been going reliably and virtually non-stop for a number of years but we’re just small and don’t generate enough to pay a huge amount of tax. Personal tax – will have to ask about that too thanks you kindly.

I’m self employed as well so know how it works. I’d think of it as a big risk though, leasing means you pay all that money and get nothing at the end of it, if you take out a loan and buy a used van then at least at the end you own it. If it goes wrong that way you can sell it to repay the loan (or at least some of it).

Personal tax wise using the van for personal use is essentially having a company car, tax is lower for vans but nowhere near what it used to be. I’ve talked about it with my accountant and for me the best way is to own the vehicle personally and charge my company mileage for the journeys done.

and change your Accountant…

Mmm yeah he was really as of the same opinion as Steve H in that thinking it is a bit riskier to go for the lease option. Did give me a long explanation about it but I was probably thinking about riding my bike at the time! Hate that hurty head stuff. I think that with some lease companies you have the option of buying the vehicle at the end but don’t know anyone who has had a lease vehicle to ask them about it. Ah well cheers for the advice, will help consider the options.Lovely.

I was just generalising tbh.

You are self employed contacting to a company, Yes?

If so then you have to consider that a lease is unbreakable. If your company or you no longer need the vehicle. You are still liable for all of the rentals.

If i was in your position, like the others have said, i would buy a good used example. That way you have gotten rid of the biggest lump of depreciation and any finance outstanding would probably be covered by the sale of the vehicle if you needed to.

I run what is classed as a van as my company car. Pay a lot less than the other guys who run c class mercs. Not the perk it was, but still worth it

From a users perspective rather than self-employed. Leasing works for us as it covers all repair costs and as we are quite heavy on vehicles with off-road use and towing we get through a lot of suspension and transmission parts. The vehicles we own, our budgets get hit when they fail, bus had an acre of welding last MoT, Land Rover with a cracked block shifted on cheap and fast.

There are limits to the abuse though, friend of mine works in a clay pit and the lease companies won’t go near them. The fact he carries explosives in his Land Rover doesn’t help.