Hi, I am confused!
My turnover over the last 4 years is low - £11 -13k a year, after expenses, about £7k. I have been using my campervan to carry out my business as a surveyor part-time and claiming the flat rate 45p a mile as an expense.
The campervan is 24 years old and is in the garage and needs about £1200 spending on it (its worth more than that and is a bit of a collectors piece) so I will be putting it into semi-retirement strictly for shopping and holidays only now to extend it's life. It is also expensive on fuel.
I plan to buy a small van for about £5000 outright. I have seen HMRC website saying that I can claim 100% as AIA as it's plant/machinary and must keep receipts for all expenses covering it. I then can claim that off my profits for this year. I have had extra work in this year and my turnover is about £17k. If I can deduct the £5k plus insurance, tax etc (with my other expenses), this will keep me below the tax threshold. This is my aim.
I phoned HMRC who were a bit fuzzy and said that I have to do the Writing Down Allowance of 8% a year instead (as its not a new van). This would mean that my personal allowance would be exceeded and so in effect I would be paying tax on the unwritten down portion of the van purchase at 20%. This can't be right surely? Everywhere I look it seems to say that I can exempt 100% of the cost especially as I am working with cash basis accounting so its an expense incurred this tax year.
I would be paying out £1500 or something in tax this year, whereas if I leased or hired a van for a while, I could remain under the personal allowance which seems a daft waste of money to me,
Can someone please help and clarify? I am new to self-employment.