Investing in a new van for your business? You might be interested to learn that you could enjoy up to 100% tax relief on your new purchase. Every company is entitled to an annual allowance of up to £200,000 to spend on new machinery and plant – and this includes refrigerated vehicles.
If you’re in the market for a new vehicle, it makes sense to take advantage of any schemes available that will allow you to reduce your overall costs. In this guide, we’ll learn more about how you can claim back 100% tax on your new vehicle to help with business cash flow and ensure you make the most of the schemes available to you.
What tax relief is available on new van purchases?
The most popular way to enjoy tax relief on a new van purchase is to make the most of your Annual Investment Allowance. This allows you to claim 100% tax relief on purchases up to £200,000. This can be used on plant and machinery purchases, which includes refrigerated vehicles.
If you choose not to claim this in the year you make your purchase, there are other ways to enjoy tax relief. For example, if you’ve already exceeded your annual investment allowance for the year, you could choose to claim your Writing Down Allowance, which allows you to deduct a percentage of the value of the item from your profits each year.
And finally, you could also use something known as the First Year Allowance, which allows you to claim tax credits on company losses related to making purchases that are considered to be environmentally friendly.
Before you make a big purchase like a refrigerated van, consult with a tax expert to help you determine the best way to maximise the tax relief on your new investment.
What other schemes are available?
There are other ways to save money on your new vehicle that don’t have to include tax breaks. The government is keen to get more environmentally-friendly vehicles on the road, so there are schemes available to make this a cheaper and more accessible option for companies.
There are other schemes available like the Plug In Grant, which allows manufacturers to offer big discounts on vans if they meet certain environmental requirements. A plug in vehicle purchased at a discount could save you money in the short term and long term, as you won’t have to invest as much upfront and you can also take advantage of the lower running costs associated with electric vehicles.
Where can I turn for advice?
For any queries related to tax savings and other schemes, we recommend speaking to your accountant or financial advisor. Remember that every business is different, and you may not be aware that you are using your Annual Investment Allowance for another purchase, so it’s vital to confirm with your accountant or advisor before making any large purchases.
Remember that taking advantage of one scheme could make you ineligible for other schemes, so you should always check the fine print before moving forward.
Closing thoughts
If you’re on the verge of investing in a new van for your business, it’s worth taking the time to explore tax relief schemes available that could save you money. In some cases, you could claim 100% of the value of the van on your business expenses, which could greatly reduce your tax liability for the year. There are also incentives and schemes available to encourage you to invest in green technology. If you take your time and explore all of your options, there are considerable savings to be found.
