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Claiming personal tax on a van across 4years ?!

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Good evening, 

my partner purchased a new van a week ago and I'm not 100% confident on how to add it as an expense. It was £30k .. old van previously claimed as full expense was traded in for £9k. We paid £9k of our own money as a deposit and the rest is spread across 4yrs on 0%.

So what do I claim for. Obviously not the trade in amount.

do I claim the money we paid as a deposit and also any monthly payments to the end of this tax return and then claim the rest of the payments yearly? 
I use quick books so the only payments showing will be these, is this correct? 

Replies (13)

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By Paul Crowley
09th Sep 2021 18:49

It depends on what the financing really is
If the purchase is a capital item then capital allowances apply
If you are effectively renting a van then then the payments are Profit and loss

Who does the tax return?
If you are not comfortable with the understanding of capital allowances then get some advice

Thanks (2)
Psycho
By Wilson Philips
09th Sep 2021 19:04

If your partner can afford to pay £30k for a van he can afford a few hundred £ for advice on how to get it right.

Thanks (5)
RLI
By lionofludesch
09th Sep 2021 19:38

Are you on cash accounting or accruals accounting ?

Are your partner's profits, before deducting the van expense, above or below £40000?

I agree with the posters above, too.

You say you're not 100% confident - how many percent confident are you ? Low enough to start thinking it's time to look for an accountant, never mind what Sanjeev says about how simple Quickbooks is ?

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Replying to lionofludesch:
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By Paul Crowley
09th Sep 2021 21:52

Genuine cash accounting Is probably rare. Never used it myself
But very valid comment as capital allowances become.....Challenging.

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Replying to Paul Crowley:
RLI
By lionofludesch
09th Sep 2021 22:07

Paul Crowley wrote:

Genuine cash accounting Is probably rare. Never used it myself
But very valid comment as capital allowances become.....Challenging.

Rare or not, the OP can't be answered until we know.

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By AdamMurphy
09th Sep 2021 19:52

B-b-but the adverts say you snap a photo and Quickbooks does it all for you?

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Replying to AdamMurphy:
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By Paul Crowley
09th Sep 2021 20:00

Based on their advertising no human needed
The same advert used by HMRC at the start of MTD promotion
MTD, the thing you do on the escalator
and according to the HMRC at the time, free software for all

Thanks (3)
My photo
By Matrix
09th Sep 2021 20:06

The bookings in Quickbooks are accounting entries. You claim a tax deduction or allowance on your tax return so your accountant can make the necessary adjustments at the end of the tax year.

Don’t worry, HMRC also thinks that you can compute reliable tax figures through your software so you are not alone.

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By Tax Dragon
11th Sep 2021 11:11

I wonder what Paul "Tooth" Crowley makes of your "obviously not the trade in amount" comment. You might get the same answer by ignoring both the disposal value of £9k and £9k of the acquisition cost as you would get by including both. You might not. But it seems to me that, whether the answer is the same or different, only one of these treatments can be correct.

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Replying to Tax Dragon:
RLI
By lionofludesch
11th Sep 2021 12:19

[sigh]

Ah - those were great days when you cold leave behind a balancing charge to cover your personal allowance and augment your losses with Capital Allowances to carry back four years and claim a tax repayment with huge amounts of interest.

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Replying to lionofludesch:
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By Tax Dragon
11th Sep 2021 12:38

Can you not do that now? Obviously not if on the cash basis. And obviously not either way if you ignore it (per the OP). And obviously huge amounts of interest no longer exist. But the basic idea can still work?

Or no? (I'm feeling seriously out of date today, what with this and DJKL's comment on trust accounting.)

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Replying to Tax Dragon:
RLI
By lionofludesch
11th Sep 2021 13:12

Tax Dragon wrote:

Can you not do that now? Obviously not if on the cash basis. And obviously not either way if you ignore it (per the OP). And obviously huge amounts of interest no longer exist. But the basic idea can still work?

Or no? (I'm feeling seriously out of date today, what with this and DJKL's comment on trust accounting.)

No. Balancing charges and Capital Allowances are now part of profits instead of stand alone charges and claims.

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Replying to lionofludesch:
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By Tax Dragon
11th Sep 2021 13:44

Aha. Yeah I can see you'd get extra planning opps if they were separate (and also didn't have to be netted off against each other). You must've had some weird rules in the old days. (Although maybe weirdness is a product of what you're used to... possibly the generation growing up with MTD as part of the fabric will find out about how we do things now and think that just as weird.)

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