Transferring a van to your new business

A. Yes, assuming there is business use of the van in your new enterprise, you can transfer it to the business and avail of some tax reliefs.

The van would come across on your first day of trading at its market value on that day. You can claim capital allowances at a rate of 12.5% per annum on that value over 8 years. These capital allowances can be offset against your trading income from your business.  If you continue to have some personal use of the van outside of your business activity, your annual capital allowances claim will be restricted for the private use element.

The ongoing running costs of the van such as insurance, motor tax, servicing, repairs, fuel etc. can also be offset against your trading income from the business. The amount of annual running costs that you can claim as business expenses should be restricted accordingly if you continue to have some personal use of the van.

If your new business is VAT registered, you can claim back VAT on your diesel costs. Again your claim for VAT back on diesel will need to be restricted to the business use element if you continue to have some private use of the van. Note VAT cannot be claimed back on petrol however.

There are various planning points to consider in relation to tax reliefs available for vehicles used in a business. If you would like to discuss your circumstances in more detail, contact us to be put in touch with your local TaxAssist Accountant.

Date published 10 Mar 2016

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.