Accounting for a van and loan

I am a sole trader. I purchased a new van from my own account. How do i attribute this on my accounts as a loan? Thanks Andy

Hi @AndyLewis

Who took the loan out - was it you or the business?

Who owns the van?

HI, thanks for the reply… I own the van, i took money from my own account to pay for it. Want to put against business. So… I have loaned money to business from my personal account.
Thanks Andy

You should probably talk to an accountant about this as they can understand your specific circumstances properly. How to best handle it depends on a number of factors, including whether or not you’re VAT registered, and if you’re not then whether it would work out better to account for the full costs through the business (with a deduction for any private use, which involves keeping a full mileage log) or treat it as a personal asset and then claim the 45p mileage rate.

If you have merely bought the van outright by using funds in a personal bank account and not your business bank account then you just have to put through a journal entry debiting account 0050 “Motor Vehicles” and crediting account 3300 “Capital Introduced for Sole Traders” with the cost of the van. If you are VAT registered, you have a valid UK VAT invoice for the van and it is indeed a van (and not an ordinary motor car) you can claim the VAT (VAT is claimable on vans but not ordinary motor cars).

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