Please help !!!

[lorman_will]

I am about to set up as a sole trader in the Building Industry for which I will need to Purchase a van. Please can someone advise me of the most efficient method with which to make my purchase? I understand there are basically three main ways to finance a vehicle, Finance Lease, Hire purchase and Contract hire. Finance Lease appears to be the most suitable and affordable however I am unsure whether I will receive the maximum tax benefit as I doubt I will be vat registered for a few years yet.

Thank you in advance for your help.

[Dave]

Well we get many messages posted here, but this is the first request for tax advice!

VAT registration isn't the issue, it's what you can set against business earnings, and as far as I know you will be treated the same in each case. The main difference is who owns the vehicle, and how much of the maintenance/running costs are in the monthly payment.

I suggest you talk to an accountant!

Dave

[Raymond]

From what I can remember one can set off the lease payments against expenses which makes the tax bill less as the profits are less because of the lease payments. At the end of most leases you have an option to purchase at a giveaway price ,which makes it practically the same as HP. The choice should be made on levels of interest charged. Find out the real price and the real interest payments on each deal to make the right choice. On the face of it it will be hidden in the capital price, so make sure you ask. It is really all about interest and tax allowance.

Raymond

[will_turner]

Hi, I think that you should hire because it have lots of benefits. I am also a business man and I recently hired five vans from frontierleasing. It’s really very good for hiring car. There are plenty of choice and special offers for customers. So I would suggest you for this service. Hope this will help you out.
All the best!