Buying vans for new staff

Vans are a necessity that keeps businesses moving. So, why pay full price for one when you can get it for less?

Read on to find out how you can get your new van for less, including information on tax relief, leasing and how you can get exclusive deals.

Should you buy or lease a van for your limited company?

This really boils down to whether you have the capital to buy a business van outright, or whether a monthly payment would sit more comfortably.

When you buy a business van, you can claim 100% of the cost of purchase against your capital allowances, which in turn reduces your corporation tax bill. You can also claim the full VAT on the purchase price.

If you lease a van for work, you don’t own the asset, therefore you can’t claim against capital allowances. You can however offset the monthly lease payments (and any interest charged on the lease deal) against your taxable profits. You can also claim for any VAT paid on the purchase price.

How to buy a van through your limited company

If you decide that buying a van through your limited company is the way forward, you’ve got the fun job of researching the most suitable model for your needs.

A word of warning though, make sure the vehicle you choose is classified as a van according to HMRC, as a car won’t be subject to the same tax allowances.

Whether you buy or lease a van through your limited company, make sure:

• All documents are in your company’s name.
• All payments go through the company’s bank account.

Checkatrade members get exclusive discounts on work vehicles from Fiat. It’s just one of the many perks of being a Checkatrade member – take a look.

Does buying a van reduce corporation tax?

Buying a work van through your limited company can be quite tax efficient.

• Vans are classified as ‘plant and machinery’ for tax purposes. Therefore under the Annual Investment Allowance regime, you can claim 100% of the cost of buying the van as part of your capital allowances.
• Essentially, you can take the whole cost of buying your work van off of your company’s taxable profits, which will reduce your corporation tax bill.
• The company can also claim the full VAT on the purchase price of a work van.

Make sure you ask your accountant:

• About the tax implications of using the work van for personal use. This is called Benefit in Kind and relates to both the vehicle itself and the fuel.
• How much of your van’s purchase price can appear in your accounts as depreciation.

What’s the best way to buy a van if you’re self-employed?

If you’re buying a van for your business as a sole trader, it’s not a bad idea to look at finance options, as long as you borrow within your means, of course.

Buying a van on finance is a way for you to build a good credit score and also manage your cash flow. And when you buy a van, it becomes a business asset, which is not the case if you lease.

• Look for discounts and deals – every penny saved works towards the bottom line. Checkatrade members get exclusive discounts with our partners, including Fiat Professional. If you’re thinking of buying a work van, check out the deals you get with a Checkatrade membership.

And don’t forget you’ll need commercial vehicle insurance (your regular car insurance will not cover you for work purposes), but we can get you a discount on that too.

Buying a van on eBay

With over 30,000 listings, eBay is a great place to find the best-used van. But how does eBay work when buying commercial vehicles? And how do you ensure you stay safe? Dan Powell of Honest John Vans shares his top 5 tips.

Sign up and start small

It only takes a few minutes to sign up for an eBay account, and it can be very tempting to start bidding for vans straight away. However, if you are completely new to eBay, start small and bid on a few small and relatively inexpensive items. This will allow you to acclimatise yourself to the way eBay operates and build that all-important eBay feedback score.

eBay is much more than an auction site

Although eBay is billed as an auction site, vans can be bought in a variety of different ways. Some vehicles will be listed at a set price and sold instantly under the ‘Buy It Now’ listing. There are also thousands of ‘Classified Adverts’, which allow you to contact the seller, and view the van before paying the price. In addition to this, there is the classic ‘Auction’, which lets you bid within a timed process. Which one is best? That will depend on your budget and the type of vehicle you want. But it’s vital to understand the difference between the three options before making a bid or offer.

You can still haggle

It might be a digital platform, but you can still perform the age-old art of haggling to get the best deal. If you are buying a van that is being sold through a classified advert, then the buying process is the same as with any other sale; be sure of its value and your maximum budget, and be prepared to haggle.

With a ‘Best Offer’ listing, eBay limits you to three attempts, so don’t waste one by tabling a ridiculously low bid. And be sure to leave yourself enough room so your final bid is the maximum you would be prepared to pay.

A ‘Buy It Now’ listing is a fixed price, which means the seller is unlikely to accept a lower offer, but it might be worth sending a polite message to see if they are willing to move the price in your favour.

Bid to win

If you are using the classic auction process, then timing is everything when it comes to winning the sale. Be ready a good five minutes before the auction is due to end and bid the absolute maximum you are prepared to pay 30 seconds before the end of the auction but don’t confirm your bid until only five seconds are remaining. This will mean other bidders won’t have enough time to enter another bid if you have outbid them. This is not a guarantee of success, someone might pip you to the post, but it will prevent you from going over your budget in the heat of the auction.

Remain smart and safe when paying

The seller may request a specific means of payment or allow a few options. Paypal offers a degree of protection, and the fee charged for the service comes out of the seller’s payment, so it is a good option for buyers. Cash in hand works if you are comfortable carrying the required amount of money – you may be able to arrange the exchange at your bank if the seller agrees.

When collecting the van, ensure the name and address on the V5C logbook matches the details of the seller and the location of the vehicle. Always ask the seller for two forms of identification to ensure they are the person that’s listed on the V5C registration document.

Is buying a van an allowable expense?

You might be wondering whether you can get tax relief on the purchase of a work van if you’re a sole trader.

The simple answer is, yes, you can. The long answer is, you can’t always claim in the same way, so we always recommend you speak with your accountant before you commit to a purchase.

You can usually claim the cost of your work van as a capital allowance. However, if you’re unable to claim the full cost of the van, you may be able to claim other work-related expenses, such as fuel, insurance, repairs and servicing, and breakdown cover. Be aware that you can’t claim for any non-work-related travel.

Quick summary

• Do your research to make sure the model you choose is classed as a ‘van’ by HMRC.
• If buying or leasing a van through your limited company, make sure all paperwork and payments go through the company.
• When you buy a work van through a limited company, you can claim 100% of the purchase price against your capital allowances, which reduces corporation tax.
• If you lease a work van, you can claim the monthly payments against your taxable profits.
• You can claim a van as a taxable expense if you’re a sole trader, but it depends on your setup. We always recommend you speak with an accountant to understand the implications for your business.
• For deals and discounts on your Fiat work van, check out the Checkatrade member benefits.