How to buy a van for your business \u2013 at a glance<\/strong> <\/h2>\n\n\n\n\n- buying vs leasing<\/strong> \u2013 when you buy a van, you have to front the costs but you\u2019re free to drive as much as you want. Leasing a van reduces the financial impact, but can limit how much you drive the van<\/li>\n\n\n\n
- tax relief<\/strong> \u2013 buying a van for your business is typically tax deductible. And if your business is VAT registered, you can claim back 100 per cent of the VAT<\/li>\n\n\n\n
- van license<\/strong> \u2013 you can only drive a van up to 3,500kg. Heavier vehicles require a specific license\u00a0<\/li>\n\n\n\n
- van security<\/strong> \u2013 the prevalence of tool theft means vans are often broken into. So anticipate extra costs to bolster your van\u2019s security<\/li>\n<\/ul>\n<\/div>\n\n\n\n
Buying a van for business use<\/strong><\/h2>\n\n\n\nBuying a van means it\u2019s yours, which brings a range of benefits. If you decide to buy instead of lease, you\u2019ll either need to buy the business van outright or fund it through a loan, which is often known as \u2018finance\u2019.<\/p>\n\n\n\n
Buying a van for your business gives you more freedom. You won\u2019t be tied into a strict lease contract and you can make changes to its appearance.<\/p>\n\n\n\n
For example, you\u2019ll be able to put your business name and contact details on the van, or make changes to the inside to suit your needs.<\/p>\n\n\n\n
You might also want to consider if you need to buy a fleet of vans, if you have a team of plumbers working for you for example.<\/p>\n\n\n\n
Leasing a business van<\/strong><\/h2>\n\n\n\nLeasing a van through a limited company is different to buying, as you won\u2019t own it outright. You\u2019ll just be renting it \u2013 typically for a monthly fee.<\/p>\n\n\n\n
If you lease a business van, you won\u2019t need a big chunk of cash as the cost is spread out over the fixed term of a contract. You\u2019ll just need to pay for a deposit and monthly repayments.<\/p>\n\n\n\n
Maintenance costs tend to be covered by the leasing company so you won\u2019t have to worry about that either. If you grow attached to the van there might be an option to buy it, as explained above. You\u2019ll just need to commit to a \u2018lease purchase\u2019 style agreement.<\/p>\n\n\n\n
If you\u2019re looking for information on business car leasing<\/a> then we have a separate guide for that.<\/p>\n\n\n\nHire purchase<\/strong><\/h2>\n\n\n\nAnother way to get hold of a business van is through hire purchase. This involves an initial deposit and you\u2019ll hire the van for a set period of time. You then have the option to buy the van at the end of your contract.<\/p>\n\n\n\n
Can I drive a van with a car licence?<\/strong><\/h2>\n\n\n\nDrivers with a standard car licence are allowed to drive a van weighing up to 3,500kg \u2013 including any passengers and cargo (that\u2019s 3.5 tonnes). Anything larger, you\u2019ll need a specific licence.<\/p>\n\n\n\n
If you passed your test before 1 January 1997, you might be able to drive a heavier van (up to 7,500kg) and tow a trailer.<\/p>\n\n\n\n
Check your driving licence record<\/a> to see what vehicles you\u2019re allowed to drive.<\/p>\n\n\n\nUsing a personal van for business<\/strong><\/h3>\n\n\n\nIs it cheaper to use a personal van or buy through your business? Depending on what you do for work, you may decide to use a van you already own for business purposes.<\/p>\n\n\n\n
But it\u2019s important to know that this can affect how you pay tax to HMRC:<\/p>\n\n\n\n
\n- if you\u2019re a sole trader<\/strong> \u2013 you\u2019ll need to work out business-related costs on your tax return or you can use simplified vehicle expenses<\/a> using HMRC flat rates rather than exact costs of buying and running your van<\/li>\n\n\n\n
- if you\u2019re a limited company<\/strong> \u2013 personal journeys will be subject to benefit in kind tax (this means completing a P11D form<\/a> for directors and any employees using a company van for personal use)<\/li>\n<\/ul>\n\n\n\n
Buy or lease a van \u2013 pros and cons<\/strong><\/h2>\n\n\n\nBefore committing to buying or leasing, it\u2019s important to bear in mind the drawbacks. By buying you\u2019ll be left solely responsible for:<\/p>\n\n\n\n
\n- the van\u2019s upkeep \u2013 including breakdowns, repairs, and general wear and tear<\/li>\n\n\n\n
- the legal logistics \u2013 your road tax and insurance responsibilities<\/li>\n<\/ul>\n\n\n\n
The costs of breakdowns and repairs can be high (particularly if you\u2019re a startup), but if you can cope with this outlay then buying could make more sense. Van leasing certainly isn\u2019t perfect for all, as you might face things like:<\/p>\n\n\n\n
\n- mileage restrictions and hefty penalties if you go over them<\/li>\n\n\n\n
- long-term contracts that may not fit with your changing circumstances<\/li>\n\n\n\n
- an overall payment that ultimately outweighs the cost of buying outright<\/li>\n<\/ul>\n\n\n\n
So, buying tends to bring a bit more freedom while a van lease could give you a little more security. Neither option is necessarily better than the other and you get tax relief with both.What fits best will depend on your business. Take a look at your balance sheet<\/a>, weigh up the pros and cons, and pick your option carefully.<\/p>\n\n\n\n\n\n![\"Infographic](\"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/buying-vs-leasing.png?w=1024\")
<\/figure>\n<\/div>\n<\/div>\n\n\n\n\n\nHow to buy a van through a limited company<\/strong><\/h2>\n\n\n\nYou may find some tax benefits through buying a van through your company.<\/p>\n\n\n\n
\n- Check your van is eligible<\/a> for you to reclaim VAT<\/li>\n\n\n\n
- Buy the van in your company\u2019s name and bank account<\/a><\/li>\n<\/ol>\n\n\n\n
You can claim back VAT on the price you bought the van to reduce your corporation tax<\/a>. You do this by making a capital allowance claim<\/a>. This just means you need to charge VAT when it comes to selling your vehicle.<\/p>\n\n\n\nTax is a complex subject so it\u2019s always best to get advice from a professional advisor or accountant to help you make your decision.<\/p>\n\n\n\n
Tax benefits and reliefs<\/strong><\/h2>\n\n\n\nHere we explain a bit more about different tax reliefs you could get when buying a business van.<\/p>\n\n\n\n
Can I claim for a van on my tax return?<\/strong><\/h3>\n\n\n\nYou can claim the cost of buying a van as expenses<\/a> against your income tax bill, but how you do so depends on how you pay tax.<\/p>\n\n\n\nIf you use traditional accounting you can claim the van as a capital allowance. Generally, the same applies if you use cash basis accounting<\/a>, unless you\u2019re using simplified expenses.<\/p>\n\n\n\nHow much tax can I claim back on a new van?<\/strong><\/h3>\n\n\n\nThere are several tax advantages of leasing a van for business. The main one is being able to claim up to 100 per cent VAT back on the monthly payments, if your business is VAT registered<\/a>. This is provided that the van is only for business use.<\/p>\n\n\n\nAnd like buying a van for a small business, you can claim the cost of van rental as an expense when it comes to filing your tax return. Your rental payments can be a tax-deductible expense.If you want to know more about allowable van, car, and travel expenses, check out the UK government\u2019s guide to travel expenses for the self employed<\/a>.<\/p>\n\n\n\nVan benefit charge<\/h3>\n\n\n\n
The table below shows the standard value you’ll need to report to HMRC if employees use a van for private journeys.<\/p>\n\n\n\n
Buying a van for business use<\/strong><\/h2>\n\n\n\nBuying a van means it\u2019s yours, which brings a range of benefits. If you decide to buy instead of lease, you\u2019ll either need to buy the business van outright or fund it through a loan, which is often known as \u2018finance\u2019.<\/p>\n\n\n\n
Buying a van for your business gives you more freedom. You won\u2019t be tied into a strict lease contract and you can make changes to its appearance.<\/p>\n\n\n\n
For example, you\u2019ll be able to put your business name and contact details on the van, or make changes to the inside to suit your needs.<\/p>\n\n\n\n
You might also want to consider if you need to buy a fleet of vans, if you have a team of plumbers working for you for example.<\/p>\n\n\n\n
Leasing a business van<\/strong><\/h2>\n\n\n\nLeasing a van through a limited company is different to buying, as you won\u2019t own it outright. You\u2019ll just be renting it \u2013 typically for a monthly fee.<\/p>\n\n\n\n
If you lease a business van, you won\u2019t need a big chunk of cash as the cost is spread out over the fixed term of a contract. You\u2019ll just need to pay for a deposit and monthly repayments.<\/p>\n\n\n\n
Maintenance costs tend to be covered by the leasing company so you won\u2019t have to worry about that either. If you grow attached to the van there might be an option to buy it, as explained above. You\u2019ll just need to commit to a \u2018lease purchase\u2019 style agreement.<\/p>\n\n\n\n
If you\u2019re looking for information on business car leasing<\/a> then we have a separate guide for that.<\/p>\n\n\n\nHire purchase<\/strong><\/h2>\n\n\n\nAnother way to get hold of a business van is through hire purchase. This involves an initial deposit and you\u2019ll hire the van for a set period of time. You then have the option to buy the van at the end of your contract.<\/p>\n\n\n\n
Can I drive a van with a car licence?<\/strong><\/h2>\n\n\n\nDrivers with a standard car licence are allowed to drive a van weighing up to 3,500kg \u2013 including any passengers and cargo (that\u2019s 3.5 tonnes). Anything larger, you\u2019ll need a specific licence.<\/p>\n\n\n\n
If you passed your test before 1 January 1997, you might be able to drive a heavier van (up to 7,500kg) and tow a trailer.<\/p>\n\n\n\n
Check your driving licence record<\/a> to see what vehicles you\u2019re allowed to drive.<\/p>\n\n\n\nUsing a personal van for business<\/strong><\/h3>\n\n\n\nIs it cheaper to use a personal van or buy through your business? Depending on what you do for work, you may decide to use a van you already own for business purposes.<\/p>\n\n\n\n
But it\u2019s important to know that this can affect how you pay tax to HMRC:<\/p>\n\n\n\n
\n- if you\u2019re a sole trader<\/strong> \u2013 you\u2019ll need to work out business-related costs on your tax return or you can use simplified vehicle expenses<\/a> using HMRC flat rates rather than exact costs of buying and running your van<\/li>\n\n\n\n
- if you\u2019re a limited company<\/strong> \u2013 personal journeys will be subject to benefit in kind tax (this means completing a P11D form<\/a> for directors and any employees using a company van for personal use)<\/li>\n<\/ul>\n\n\n\n
Buy or lease a van \u2013 pros and cons<\/strong><\/h2>\n\n\n\nBefore committing to buying or leasing, it\u2019s important to bear in mind the drawbacks. By buying you\u2019ll be left solely responsible for:<\/p>\n\n\n\n
\n- the van\u2019s upkeep \u2013 including breakdowns, repairs, and general wear and tear<\/li>\n\n\n\n
- the legal logistics \u2013 your road tax and insurance responsibilities<\/li>\n<\/ul>\n\n\n\n
The costs of breakdowns and repairs can be high (particularly if you\u2019re a startup), but if you can cope with this outlay then buying could make more sense. Van leasing certainly isn\u2019t perfect for all, as you might face things like:<\/p>\n\n\n\n
\n- mileage restrictions and hefty penalties if you go over them<\/li>\n\n\n\n
- long-term contracts that may not fit with your changing circumstances<\/li>\n\n\n\n
- an overall payment that ultimately outweighs the cost of buying outright<\/li>\n<\/ul>\n\n\n\n
So, buying tends to bring a bit more freedom while a van lease could give you a little more security. Neither option is necessarily better than the other and you get tax relief with both.What fits best will depend on your business. Take a look at your balance sheet<\/a>, weigh up the pros and cons, and pick your option carefully.<\/p>\n\n\n\n\n\n<\/figure>\n<\/div>\n<\/div>\n\n\n\n\n\nHow to buy a van through a limited company<\/strong><\/h2>\n\n\n\nYou may find some tax benefits through buying a van through your company.<\/p>\n\n\n\n
\n- Check your van is eligible<\/a> for you to reclaim VAT<\/li>\n\n\n\n
- Buy the van in your company\u2019s name and bank account<\/a><\/li>\n<\/ol>\n\n\n\n
You can claim back VAT on the price you bought the van to reduce your corporation tax<\/a>. You do this by making a capital allowance claim<\/a>. This just means you need to charge VAT when it comes to selling your vehicle.<\/p>\n\n\n\nTax is a complex subject so it\u2019s always best to get advice from a professional advisor or accountant to help you make your decision.<\/p>\n\n\n\n
Tax benefits and reliefs<\/strong><\/h2>\n\n\n\nHere we explain a bit more about different tax reliefs you could get when buying a business van.<\/p>\n\n\n\n
Can I claim for a van on my tax return?<\/strong><\/h3>\n\n\n\nYou can claim the cost of buying a van as expenses<\/a> against your income tax bill, but how you do so depends on how you pay tax.<\/p>\n\n\n\nIf you use traditional accounting you can claim the van as a capital allowance. Generally, the same applies if you use cash basis accounting<\/a>, unless you\u2019re using simplified expenses.<\/p>\n\n\n\nHow much tax can I claim back on a new van?<\/strong><\/h3>\n\n\n\nThere are several tax advantages of leasing a van for business. The main one is being able to claim up to 100 per cent VAT back on the monthly payments, if your business is VAT registered<\/a>. This is provided that the van is only for business use.<\/p>\n\n\n\nAnd like buying a van for a small business, you can claim the cost of van rental as an expense when it comes to filing your tax return. Your rental payments can be a tax-deductible expense.If you want to know more about allowable van, car, and travel expenses, check out the UK government\u2019s guide to travel expenses for the self employed<\/a>.<\/p>\n\n\n\nVan benefit charge<\/h3>\n\n\n\n
The table below shows the standard value you’ll need to report to HMRC if employees use a van for private journeys.<\/p>\n\n\n\n
Leasing a van through a limited company is different to buying, as you won\u2019t own it outright. You\u2019ll just be renting it \u2013 typically for a monthly fee.<\/p>\n\n\n\n
If you lease a business van, you won\u2019t need a big chunk of cash as the cost is spread out over the fixed term of a contract. You\u2019ll just need to pay for a deposit and monthly repayments.<\/p>\n\n\n\n
Maintenance costs tend to be covered by the leasing company so you won\u2019t have to worry about that either. If you grow attached to the van there might be an option to buy it, as explained above. You\u2019ll just need to commit to a \u2018lease purchase\u2019 style agreement.<\/p>\n\n\n\n
If you\u2019re looking for information on business car leasing<\/a> then we have a separate guide for that.<\/p>\n\n\n\n Another way to get hold of a business van is through hire purchase. This involves an initial deposit and you\u2019ll hire the van for a set period of time. You then have the option to buy the van at the end of your contract.<\/p>\n\n\n\n Drivers with a standard car licence are allowed to drive a van weighing up to 3,500kg \u2013 including any passengers and cargo (that\u2019s 3.5 tonnes). Anything larger, you\u2019ll need a specific licence.<\/p>\n\n\n\n If you passed your test before 1 January 1997, you might be able to drive a heavier van (up to 7,500kg) and tow a trailer.<\/p>\n\n\n\n Check your driving licence record<\/a> to see what vehicles you\u2019re allowed to drive.<\/p>\n\n\n\n Is it cheaper to use a personal van or buy through your business? Depending on what you do for work, you may decide to use a van you already own for business purposes.<\/p>\n\n\n\n But it\u2019s important to know that this can affect how you pay tax to HMRC:<\/p>\n\n\n\n Before committing to buying or leasing, it\u2019s important to bear in mind the drawbacks. By buying you\u2019ll be left solely responsible for:<\/p>\n\n\n\n The costs of breakdowns and repairs can be high (particularly if you\u2019re a startup), but if you can cope with this outlay then buying could make more sense. Van leasing certainly isn\u2019t perfect for all, as you might face things like:<\/p>\n\n\n\n So, buying tends to bring a bit more freedom while a van lease could give you a little more security. Neither option is necessarily better than the other and you get tax relief with both.What fits best will depend on your business. Take a look at your balance sheet<\/a>, weigh up the pros and cons, and pick your option carefully.<\/p>\n\n\n\n You may find some tax benefits through buying a van through your company.<\/p>\n\n\n\n You can claim back VAT on the price you bought the van to reduce your corporation tax<\/a>. You do this by making a capital allowance claim<\/a>. This just means you need to charge VAT when it comes to selling your vehicle.<\/p>\n\n\n\n Tax is a complex subject so it\u2019s always best to get advice from a professional advisor or accountant to help you make your decision.<\/p>\n\n\n\n Here we explain a bit more about different tax reliefs you could get when buying a business van.<\/p>\n\n\n\n You can claim the cost of buying a van as expenses<\/a> against your income tax bill, but how you do so depends on how you pay tax.<\/p>\n\n\n\n If you use traditional accounting you can claim the van as a capital allowance. Generally, the same applies if you use cash basis accounting<\/a>, unless you\u2019re using simplified expenses.<\/p>\n\n\n\n There are several tax advantages of leasing a van for business. The main one is being able to claim up to 100 per cent VAT back on the monthly payments, if your business is VAT registered<\/a>. This is provided that the van is only for business use.<\/p>\n\n\n\n And like buying a van for a small business, you can claim the cost of van rental as an expense when it comes to filing your tax return. Your rental payments can be a tax-deductible expense.If you want to know more about allowable van, car, and travel expenses, check out the UK government\u2019s guide to travel expenses for the self employed<\/a>.<\/p>\n\n\n\n The table below shows the standard value you’ll need to report to HMRC if employees use a van for private journeys.<\/p>\n\n\n\nHire purchase<\/strong><\/h2>\n\n\n\n
Can I drive a van with a car licence?<\/strong><\/h2>\n\n\n\n
Using a personal van for business<\/strong><\/h3>\n\n\n\n
\n
Buy or lease a van \u2013 pros and cons<\/strong><\/h2>\n\n\n\n
\n
\n
<\/figure>\n<\/div>\n<\/div>\n\n\n\nHow to buy a van through a limited company<\/strong><\/h2>\n\n\n\n
\n
Tax benefits and reliefs<\/strong><\/h2>\n\n\n\n
Can I claim for a van on my tax return?<\/strong><\/h3>\n\n\n\n
How much tax can I claim back on a new van?<\/strong><\/h3>\n\n\n\n
Van benefit charge<\/h3>\n\n\n\n