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Van or Car?

I am a small business owner and I am planning to change some of the business’ vehicles this year. Some of my mates have been telling me vans are the best option. Are they right, and if so, can you explain why?

The advice from your friends is actually pretty sensible. Vans have a number of advantages for tax purposes:

  • More relaxed rules with regards to avoiding benefit in kind charges
  • Lower benefit in kind charges- both for the provision of the vehicle and fuel
  • Any input VAT suffered on its purchase can usually be reclaimed
  • Vans should qualify for the Annual Investment Allowance for Capital Allowances purposes

Defining a van can be tricky, as there are different criteria for different areas of tax, but try to stick to the following conditions:

  • A vehicle that is not commonly used as a private vehicle and is unsuitable for such use
  • A vehicle primarily suited for the transportation of goods- no rear seats/ windows,
  • Has a maximum legal laden weight of 3,500kg

Discussing this with an accountant before you make any purchases, could prevent you from losing tax relief and being unable to reclaim VAT.  So if you would like to discuss your vehicle purchases in more depth, please feel free to contact your local TaxAssist Accountant.


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