I am a VAT-registered sole trader courier and am thinking of hiring a van as opposed to buying one. The rental payments through Northgate will be €715.00 per month plus VAT over three years at which time I give the van back, walk away or take another van. In addition to claiming back the VAT on the monthly hire cost, can I set the remaining hire cost against my profits as a deductible expense before working out my personal tax (income tax, USC, PRSI, etc) liabilities? I assume I cannot charge depreciation to the business or avail of any capital allowances as I do not own the van?
Filed under commercial vehicle - Asked by JOHN MCCOURT (Cavan) - Wed, 26 Feb 2020 14:48
In general, we would suggest that you’re spot on with that — you’ll be able to charge the monthly outlay as a routine business expense, but won’t be able to claim for depreciation or maintenance. Having said that, please remember that we’re not tax accountants and so we’d definitely advise checking with your own accountant before making any hard and fast decisions.
If you are already registered, you can log in to send your question. Otherwise, please complete the following. Only your name is mandatory, but if you enter your email address, you will be notified when your question has been answered by our experts.