LEASING COMMERCIALS
Tax relief on a van or other
commercial vehicle is a percentage of its cost new
(or written down value) and is spread over the useful
working life of the goods.
Lessees (users of vehicles) can obtain tax relief
on rentals made to leasing companies for equipment
used in the business including vans and other commercial
vehicles.
Where a van user is not VAT registered 100% of rental
plus all of the vat can be offset against taxable
profits on a van.
Example of purchase versus leasing tax allowances:
| Purchase
/ HP etc |
Leasing
3 + 35 profile |
| Cost new £10,000 |
3 + 35 rentals of £300 |
1st year tax relief 25% £2,500
Written down value Yr. 1 £7,500 |
Yr. 1, 14 payments - £3,800 |
2nd year tax relief 25% £1,875
Written down value Yr. 2 £5,625 |
Yr. 2, 12 payments -
£3,800 |
3rd
year tax relief 25% - 1406.25
Written down value Yr. 3 £4,218.75 |
Yr.
3, 12 payments - £3,800
*payments equalised as per SP3/91 |
| Tax allowances
£5,781 |
Total
tax allowance £11,400 |
These allowances
are offset against the rate of tax that the business
is paying, either sole trader partnership rate
(personal tax for self employed or corporation
tax)
Please contact our specialists for
further details.
Back to the top
|
