My father recently retired age 62. He was working in retail for the past 20 years but prior to that was a carpenter, something he now wants to return to.
He wants to set up as a sole trader and purchase a van for 14k. Given his current energy levels and recent ill health I would be surprised if this venture yielded much of an income. I would expect 1 or 2k per year. However it is something he really wants to do.
My understanding is that through setting up as a sole trader he could write off the cost of the van over 5 years. Based on my estimates that would have him making a loss for each of those 5 years meaning that he could claim back tax that he would pay on a small second property he is renting out. Am I correct here?
If so is this smart or is it something that the revenue would see as a stunt and frown on. It genuinely wouldn't be intended to be, my father would be honest to a fault.
To complete the picture he would be buying the van as a replacement for his car so it would also be used for private trips the majority of the time.
The alternative as we see it is for him just to buy the van as a private owner, not write it off against anything and just declare any bit of income he may earn and pay standard tax on it. This would leave him significantly worse off and I would imagine make things quiet tight for him.
Any advice much appreciated?
He wants to set up as a sole trader and purchase a van for 14k. Given his current energy levels and recent ill health I would be surprised if this venture yielded much of an income. I would expect 1 or 2k per year. However it is something he really wants to do.
My understanding is that through setting up as a sole trader he could write off the cost of the van over 5 years. Based on my estimates that would have him making a loss for each of those 5 years meaning that he could claim back tax that he would pay on a small second property he is renting out. Am I correct here?
If so is this smart or is it something that the revenue would see as a stunt and frown on. It genuinely wouldn't be intended to be, my father would be honest to a fault.
To complete the picture he would be buying the van as a replacement for his car so it would also be used for private trips the majority of the time.
The alternative as we see it is for him just to buy the van as a private owner, not write it off against anything and just declare any bit of income he may earn and pay standard tax on it. This would leave him significantly worse off and I would imagine make things quiet tight for him.
Any advice much appreciated?