Sole trader vehicle advice please

[boymum45]

I'm about to go self employed and become a sole trader and after some advice on a vehicle please for work and personal use. What is the most tax efficient way to get a vehicle? I have the money to purchase one out right but need to know if I can deduct the entire car/pickup. I hear that pickups are commercial so you can get 100% back in year one. What happens after this? If you sell that vehicle and buy another one what happens to the money you get for the first one. Thank you

Commercial is definitely the best route. When you sell it the money will be counted as profit on your account.

Check out the VAT issue, it's chargeable on 2nd hand commercial vehicles as well, so unless you're VAT registered that's an extra 20% on the cost.

It totally depends on the type of work you are doing and if your vehicle is necessary for your job and used mostly for it (ie the vast, vast majority of use is for your work). DH and I are both self-employed, he has a commercial vehicle but I do not as I don't pass the threshold (we use the same accountant and this advice is directly from them.) I just claim mileage at the HMRC rate.

How his is worked out is very complicated and includes capital cost in the year of purchase, depreciation and then some sort of percentage calculation set by HMRC but it does work out to be somewhat tax efficient.

If you have a mucky, manual trade you won't get a vehicle on finance in any case so you may as well buy outright/with a loan.

We looked at getting an electric vehicle with a big tax break but they wouldn't allow it for a landscaper/builder!

As a sole trader, even with a commercial vehicle, your claim is still restricted by any private use. So if you used it 50:50 between business and private, you'd only be allowed to claim half the costs as an expense.