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buying a van and claiming AIA

Do i need to put my own money upfront then claim? Will my low income have a factor in claiming?

I work as a sole trader and need a van for my business. I am aware i can write off the total cost of a van by claiming AIA in my tax return. i just dont know the finer details.

1. I am on a low income. for example i earnt 12000 last year is it viable and legal to purchase a brand new van even though my income dictates that i could not purchase a van with the value of say £25000? Or would i have to purchase a used vehicle at say £10000

2. How does the transaction work? Do i need to put down the initial cost myself and then claim the money back from HMRC when i do my tax return?

3. Is it better to claim the full balance of the van in the first year or spread it out over 5 years as in depreciate it?

4. How would hire purchase work? would i just reclaim the total of the monthly repayments?

5. will claiming AIA affect my other expenses ie mileage, equipment?

Thank you for reading i appreciate any help you have.

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14th Sep 2018 20:27

I'm afraid that if you are in business, even earning a modest amount, you would still benefit from taking professional advice. The cost isn't that great and will ensure you do what's best for you while keeping you the right side of HMRC.

Speak to a few local accountants. Most will have a no cost chat with you, so you can see who you feel is the right fit for you.

If you don't want to do that, you can try here (although many posters there think that they know more than they do):

https://www.ukbusinessforums.co.uk/forums/accounts-finance.55/

Thanks (1)
By Ruddles
to Accountant A
15th Sep 2018 08:29

Accountant A wrote:
If you don't want to do that, you can try here (although many posters there think that they know more than they do):
https://www.ukbusinessforums.co.uk/forums/accounts-finance.55/

A bit like this site, then
Thanks (2)
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to Ruddles
15th Sep 2018 10:49

Ruddles wrote:

Accountant A wrote: If you don't want to do that, you can try here (although many posters there think that they know more than they do):
https://www.ukbusinessforums.co.uk/forums/accounts-finance.55/

A bit like this site, then

Sadly, very true.

Thanks (1)
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15th Sep 2018 08:20

There are probably gaps in what you have told us (very few OPs provide all the relevant info). But I'm gonna assume you've told us everything we need to know to comment.

I would not claim AIA. Most local accountants would probably tell you why not in your initial free meeting. They might put you straight on other things too. AccountantA's advice is good - sign up with one (choose AccountantB... A sometimes gets temperamental) and you will save money. One (of many) advantages of hiring an accountant over firing questions at randoms like A and me online is that your accountant will be better at filling in the gaps. Their answers will therefore be more relevant to you than ours could ever be.

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to Tax Dragon
15th Sep 2018 10:50

Tax Dragon wrote:

AccountantA's advice is good - sign up with one (choose AccountantB... A sometimes gets temperamental)

Only 'sometimes'? How dare you?

Thanks (2)
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to Accountant A
15th Sep 2018 17:37

I've been mulling over this.

"Only 'sometimes'" implies you think it's 'always'.

So that leads to "always getting temperamental".

It's like reading tax law.

Always... unchanging
Getting... changing
Temperamental... changingly changing.

Mindmelt.

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By SXGuy
15th Sep 2018 08:34

Woah slow down.

From your assumptions it's clear that you do not have an understanding of how claiming AIA works.

I'd strongly suggest talking to an accountant.

Thanks (1)
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15th Sep 2018 12:42

thank you all for your advice. I am going to book a consultation with an accountant next week. i have never used AIA before and was puzzled to how it works and I didn't want to get myself into trouble hence I asked here first.
Is what I originally asked even possible? could I get a0 can for my business and offset the cost against my tax?

Thanks (0)
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to Ncc1701D
15th Sep 2018 15:44

Your questions make me wonder about the gaps (see my previous response) and/or what you told us (or at least how I read it). If you're paying that much (if any) tax on 12k income (what do you mean by earnt/income?) then something's gone badly wrong.

Talk it through with the accountant. Face to face is so much better than this.

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to Ncc1701D
15th Sep 2018 17:49

Ncc1701D wrote:

thank you all for your advice. I am going to book a consultation with an accountant next week. i have never used AIA before and was puzzled to how it works and I didn't want to get myself into trouble hence I asked here first.
Is what I originally asked even possible? could I get a0 can for my business and offset the cost against my tax?

Yeah - but you're not paying any tax if you're on £12000 a year. That's the point. The tax help you'd get is nugatory yet you're proposing to spend two years' income on a van.

It makes no sense.

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15th Sep 2018 16:59

Hope you're not expecting HMRC to pay for your van. You're just entitled to tax relief.

If you're only earning £12000, you'll get precious little financial help from the Government as you're already paying next to no tax and NI about £500, I'd guess.

The best help I can give to advise you to visit an accountant as you're in way, way over your head. But to get a tax subsidy, you need to earn more - that's the bottom line.

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15th Sep 2018 20:46

This is so obviously a wind up I wasn't even going to comment. But then folks started treating it like a serious question, which is just so daft I had to post just to say "for goodness sake people you're being taken for a ride. Have some self-respect".

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