Depreciation on a Used Vehicle

TTDublin

I've a 6 year old van and I've set up a small business this year.

How do I value the depreciation on an old van. It's worth about 7k - so do I 12.5% of this as depreciation. I only use it for work we have a car.

Thanks

TTDublin

Anyone on this...

Itchianus

TTDublin wrote: »

I've a 6 year old van and I've set up a small business this year.

How do I value the depreciation on an old van. It's worth about 7k - so do I 12.5% of this as depreciation. I only use it for work we have a car.

Thanks

For accounts purposes you can depreciate it however you like.

For tax purposes you can claim a wear & tear allowance over 8 years (12.5% per annum) based on the price you paid for the van. When you say it's 6 years old, I presume you haven't owned it for the 6 years?

CIARAN_BOYLE

TTDublin wrote: »

I've a 6 year old van and I've set up a small business this year.

How do I value the depreciation on an old van. It's worth about 7k - so do I 12.5% of this as depreciation. I only use it for work we have a car.

Thanks

Just so you know driving to work from your home counts as personal use for tax purposes

Itchianus

CIARAN_BOYLE wrote: »

Just so you know driving to work from your home counts as personal use for tax purposes

Except in the case of a sole trader whose business address is their home..!

TTDublin

Itchianus wrote: »

For accounts purposes you can depreciate it however you like.

For tax purposes you can claim a wear & tear allowance over 8 years (12.5% per annum) based on the price you paid for the van. When you say it's 6 years old, I presume you haven't owned it for the 6 years?

Yes I had it already and decided to put it to use so I'm not sure how to deal with it.
I was thinking that I'd just put a market value on it at the time I started up the business and then depreciate it over a few years.
I don't really use it for personal reasons anymore...

Itchianus

TTDublin wrote: »

Yes I had it already and decided to put it to use so I'm not sure how to deal with it.
I was thinking that I'd just put a market value on it at the time I started up the business and then depreciate it over a few years.
I don't really use it for personal reasons anymore...

You can't take a Market value on the date you started, you have to take the price you paid originally and reduce it by 12.5% for each year you had it prior to registering, then continuing to claim the same 12.5% each year till you reach zero.

You also need to adjust the 12.5% downwards by some fraction to reflect personal use. otherwise you're trying to say a van (not even a car) that you previously bought solely for private use (since you weren't a sole trader at the time...?), just suddenly stopped being used for private use the day you started in business...?? Good luck selling that in an audit situation.

Mr. Incognito

You can take 12.5% of the Original Purchase price as a deduction this year and next year discounting any portion that it is used for personal use. i.e if it is only used for business use 50% of the time half the depreciation.

There are caps on Original purchase prices for motor vehicles but not on Vans