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Buying a Van for Your Business: Tax & Finance Tips 🚚

Updated: Oct 7

Buying a van or work vehicle for your business? Here’s how to get the best value, choose the right finance option, and maximise your tax relief — whether you’re a sole trader or limited company.


buying a van for business

How to get the best value for money when buying a van


The best deals usually depend on how you pay for the vehicle. Here’s how each option compares:


  1. Cash / outright purchase – usually offers the best overall value.

  2. 💳 Third-party finance (bank loan) – still good value, with flexible repayment terms.

  3. 🚗 Hire Purchase (via dealer) – spreads cost but you’ll pay interest.

  4. ⚠️ Leasing – Least preferrable - usually carrying the highest cost over its lifetime!


How to maximise tax relief


In this guide we're talking about vans used for business only (not personally). Cars with mixed use have different rules.


All of the above methods of purchase will allow you to set the full cost of the van against your profits. The difference is in timing.


  • Purchasing via cash, loan or Hire Purchase (options 1 - 3) means that the business can claim Annual Investment Allowance and offset the whole purchase price against taxable profits in the year of purchase (even if repayments are spread over several years). This is usually considered preferable.

  • Leasing a vehicle (option 4) means that tax relief is spread throughout the lease agreement - usually several years.


Get the paperwork right


For sole traders and partnerships, the vehicle can be purchased in the proprietor’s or partners’ names. For limited companies, make sure all documents are in the company’s name (not the director’s), including:


  • Purchase invoice

  • Loan / Hire Purchase or lease agreement and accompanying Direct Debit agreement

  • V5C (vehicle log book)

  • Insurance agreements


Final Thoughts


Buying a vehicle is a big investment. With the right finance option and tax planning, you can save money and keep your records compliant.


👉 Before you commit reach out for tailored advice.



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