Running a business is demanding and the financial side can often seem complicated, especially when it comes to understanding and calculating tax. While the short answer to the question in the title is ‘yes’, it is not that straightforward in truth. Let’s take a look at the answer in more detail.
Tax deductibility on leasing a van
It is common practice for UK businesses to lease their vehicles. Leasing a van is an attractive option for businesses, not least because the payments are regular. At the time of writing, the regular lease payments are looked upon as a business expense in UK tax law in the same way as rent for premises and fuel bills.
Leasing is tax deductible only if you are planning to return the vehicle at the end of the contract, not if there is an option for you to purchase it. As lease payments invariably incur VAT, this portion can be claimed back if your company is VAT-registered. The remainder of the payment can then be offset against profit, reducing your year-end tax bill.
Other related costs, such as fuel, insurance and servicing, are also tax deductible; however, costs for non-business related travel, driving-related fines and use of the vehicle to travel to and from work cannot be claimed. Visit the Gov.uk website for up-to-date guidance on what can and cannot be claimed in relation to your leased van.
Hiring a van
If you are looking for van rental Bristol, you can hire a vehicle from a local firm such as www.autolynecarvanrental.co.uk/van-hire-bristol safe in the knowledge that at least some of your expenses will be covered.
If you decide to hire a vehicle short term or to lease it for the medium term, it is important to keep meticulous records on its maintenance, its upkeep, and how it is used. If you are looking to add leased vans to your fleet, check that your intended usage suits the terms and conditions of the lease and consult your accountant to understand the proportion of your expenses that are tax-deductible.