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Claiming AIA on Van

Accounting Transactions

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Good Afternoon :)

We purchased a van in the 1st year of setting up our new business - im doing the year end accounts now / Self Assessment and im aware that we can reclaim the cost of the van in this year as AIA. 

My question is - in the accounts do i need to do anything? The van is in the Assets section which i know is correct , but with no depreciation as such will it just stay there now?

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By Duggimon
05th May 2020 14:40

AIA is not reflected in the accounts, unless you're a limited company in which case it is often reflected in the deferred tax provision.

Where did you find a van that doesn't depreciate? I have a number of clients who would be interested in a van that holds its value indefinitely.

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By Tim Vane
05th May 2020 14:51

I would definitely appreciate a van that does not depreciate.

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By Kimbers14
05th May 2020 14:58

Ah thanks - I meant more in the self assessment aspect of things - once i've claimed the AIA thats it i don't claim any capital allowances relating to the van what so ever at any point.
The van will still be depreciated in my accounts like other assetts :)

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Replying to Kimbers14:
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By SXGuy
05th May 2020 15:13

I'm gonna take a wild guess and say the cost of the van is greater than the net profit shown on the accounts.

So for that reason I don't see the benefit of using AIA and as Duncan would say, I'm oot.

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Replying to SXGuy:
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By Kimbers14
05th May 2020 15:32

Net Profit was 16k, Van was 9k - CIS registered so the amount thats already been paid to HMRC is quite a lot, im not working at the moment due to lockdown so the rebate to be honest would keep me going.

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Replying to Kimbers14:
Hallerud at Easter
By DJKL
05th May 2020 16:12

Other income and personal allowance use possibly ought to figure in what you claim re 2019/2020.

An accountant can save you money, wasting the CAs on say possibly£5k of spend @29% (IT and Class IV) is what? **
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**Circa £1,450 tax/ class IV paid

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Replying to Kimbers14:
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By SXGuy
05th May 2020 18:47

Do the maths.

16k profit less 12500 PA leaves you taxable income on 3500. You want to waste 9k of allowance to reduce that to 0? On top of that you've already paid the tax that's due and will get a refund on the rest.

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Replying to SXGuy:
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By Kimbers14
05th May 2020 19:05

I appreciate what your saying - the figures are :
Earnings from being employed for 6 months- 9900
Net Profit from being self Employed 16000
Less the tax I paid from being employed 494
Less the tax I've already paid as part of the Construction Industry Scheme 3600
So if I claim the WDA of 18% my rebate will be around 1600 pound
If I claim the van as AIA my rebate will be around 3500
I'm not working at the moment due to lockdown and to be honest I rather have the money now than over the next few years.
I appreciate any comments :)

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Replying to Kimbers14:
RLI
By lionofludesch
06th May 2020 02:17

Kimbers14 wrote:

So if I claim the WDA of 18% my rebate will be around 1600 pound
If I claim the van as AIA my rebate will be around 3500

You're probably correct to say that claiming the full cost as AIA is your best option but your choice is not £9000 or 18% of £9000. It's any number you like from £0 to £9000.

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By Wanderer
05th May 2020 15:57

Kimbers14 wrote:

im aware that we can reclaim the cost of the van in this year as AIA.

You are absolutely wrong!
You cannot reclaim the cost.
You probably can claim Capital Allowances as AIA however this is very different from reclaiming the costs.
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