Van Tax Deductions for Self-Employed Tradespeople — What You Can Claim

For most self-employed tradespeople, the van is the business. Without it you can't get to site, can't carry tools, can't do the job. It's also one of the largest costs you have — and one of the areas where HMRC allows generous deductions that many people don't fully use.

Here's what you can claim, how to do it, and where the boundaries are.

The basic rule If your van is used exclusively for business, all running costs are fully deductible. If it's also used privately, you need to apportion the claim — business miles as a percentage of total miles.

Most sole traders who use their van primarily for work, and have a separate personal vehicle, can legitimately claim the full running costs on the van. If the van is your only vehicle and you use it for the school run and weekend trips, you need to be more careful.

What you can claim — running costs method If you're claiming actual costs (rather than mileage rate):

Fuel — all fuel for business journeys. Keep records of when you fill up and for which jobs. Insurance — van insurance, breakdown cover, all fully claimable Road tax (Vehicle Excise Duty) — claimable in full MOT and servicing — claimable in full Tyres and repairs — claimable in full Parking costs on business trips — claimable (parking fines are not) Toll and congestion charges on business journeys — claimable Van wash and cleaning — claimable (it's maintenance)

For the van itself — capital allowances The purchase price of the van isn't claimed as a single expense in the year you buy it. It goes through capital allowances — specifically the Annual Investment Allowance (AIA) for most sole traders, which currently lets you write off the full cost of a qualifying commercial vehicle in the year of purchase.

A new van costing £25,000? You can deduct all £25,000 from your taxable profits in year one, subject to the AIA limit (currently £1 million, so irrelevant for most sole traders).

If you buy on finance — hire purchase — the AIA claim works the same way if you've taken legal ownership. If it's a lease (you never own the van), the monthly lease payments are an allowable expense instead, but you can't claim capital allowances.

The mileage rate method — an alternative for lower-mileage traders Instead of claiming actual costs, you can use HMRC's approved mileage rates: 45p per mile for the first 10,000 business miles in the tax year 25p per mile after that

This covers all your running costs and the depreciation of the vehicle. You can't also claim fuel, insurance or servicing separately under this method — it's a flat rate that covers everything.

For a tradesperson doing 15,000 business miles a year, the mileage method gives: 10,000 x £0.45 = £4,500 5,000 x £0.25 = £1,250 Total: £5,750

For the same trader with a £25,000 van, actual fuel at 35mpg, insurance and running costs, the actual cost method will almost certainly be better. But for someone doing lower mileage in an older van with minimal running costs, the mileage method might suit better.

You must choose a method when you first use a vehicle for business and stick with it for that vehicle. You can't switch.

Keeping records

HMRC can ask for evidence of your business mileage. A mileage log — even a simple note in your phone of date, destination and purpose for each journey — is your protection. It doesn't need to be complicated, but it does need to exist.

For fuel, keep receipts. Most van drivers fill up at the same few stations repeatedly — bank statements plus receipts is usually sufficient.

What you can't claim Personal journeys — home to your regular place of work if you have one (though for most sole traders, every journey is to a different job site so this is rarely an issue) Parking fines Speeding fines Any element of private use

The practical approach For most tradespeople using a dedicated van for work with a separate car for personal use, claim everything. Keep fuel receipts, hold on to servicing and insurance documents, note your mileage annually.

If the van doubles as the family runabout, sit down with your accountant and work out a defensible business use percentage — and document how you arrived at it.