Yes, you can claim capital allowances on a second hand van, and in most cases the full 100% in the year you buy it. A used van is shut out of the two reliefs that grab the headlines, full expensing and the new 40% first-year allowance, because both apply only to plant that is brand new and unused. But the Annual Investment Allowance (AIA) expressly covers second-hand plant and gives that same 100% deduction, so the real question for a used van is never "do I get full expensing", it is "do I take 100% through the AIA, or the 14% writing-down allowance". Get that fork wrong (claim the AIA when you are actually on the cash basis, or miss a connected-party denial) and you either overstate relief or lose the claim, so the conditions, the traps and the balancing charge on a later sale are worth getting right before you buy.
A van you use to visit, inspect, maintain and supply your let properties is plant used in the business. It is not plant for use inside a dwelling, so the dwelling-house bar that blocks furniture and fittings inside a let home does not apply to it. Everything below assumes a used van. If you are buying a brand-new van and want full expensing, the 40% allowance and the double-cab pickup trap, that is covered in capital allowances on vans. For previously owned plant and machinery more generally (gifts, assets brought in from another business, the general exclusions), see claiming AIA on second hand assets.
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Why "second hand" changes the answer
Capital allowances let you deduct the cost of a qualifying business asset from your taxable profits, rather than only claiming accounting depreciation, which is not tax deductible [1]. For a van there are four possible routes, and "second hand" knocks out two of them before you start.
Full expensing (Capital Allowances Act 2001 s.45S) gives a 100% first-year allowance, but only on plant that is, in the words of the legislation, "unused and not second-hand", and only to a company within the charge to corporation tax [2]. The new 40% first-year allowance for main-rate plant (Finance Act 2026 s.29, inserting s.45U into the Capital Allowances Act 2001, for expenditure from 1 January 2026) carries the same "unused and not second-hand" condition and excludes cars [3]. A second hand van fails the unused test, so it qualifies for neither.
What a used van does qualify for is the Annual Investment Allowance (AIA), which expressly covers new and second-hand plant and still gives a 100% deduction in year one, and the writing-down allowance (WDA) at 14% in the main pool if the AIA is not used or is unavailable. The table below is the whole topic in one view.
| Relief | New and unused required? | Available to a used van? | Who can use it |
|---|---|---|---|
| Full expensing (s.45S) | Yes | No | Companies only |
| 40% first-year allowance (s.45U) | Yes | No | Most businesses, excludes cars |
| Annual Investment Allowance (s.51A) | No | Yes, 100% in year one | Companies and unincorporated |
| Writing-down allowance (s.56) | No | Yes, 14% a year | Companies and unincorporated |
To put the most common question to bed: is a second hand van eligible for full expensing? No. Full expensing and the 40% first-year allowance both demand an asset that is "unused and not second-hand", and a used van fails that test on the day you buy it, however new it looks. That eligibility point catches a lot of landlords out, because the reliefs are marketed hard and the word "second-hand" buried in the conditions is easy to miss. So the headline is still reassuring: a used van keeps its full 100% in year one, just through the AIA rather than the first-year allowances. What matters from here are the conditions and the traps that decide whether you actually keep it.
The Annual Investment Allowance on a used van: 100% in year one
The AIA (Capital Allowances Act 2001 s.51A) gives a 100% deduction on qualifying plant and machinery in the period you buy it, up to a limit that is now £1,000,000 a year and permanent [4]. The AIA contains no restriction limiting it to new assets, which is exactly why it rescues a used van where full expensing and the 40% allowance cannot. It is available to individual landlords and partnerships as well as companies.
Worked example 1, AIA on a used van. Aisha runs a small portfolio as a sole trader on the accruals basis. In June 2026 she buys a second hand Ford Transit for £14,000 to carry tools and materials between her lets. She has not used her AIA on anything else this year. She claims the AIA and deducts the full £14,000 from her property profits in 2026/27. The van is plant used in the business, not plant for use inside a dwelling, so the dwelling-house restriction does not bite.
If you buy more than one large item in a year, or you have a bigger portfolio, the £1,000,000 limit and the way related companies share a single allowance start to matter. For that detail see our guides to the Annual Investment Allowance and the AIA for landlords.
What writing down allowance applies to a second hand van?
The writing down allowance on a second hand van is 14% a year on the reducing balance, in the main capital allowances pool. This is the route that applies if you choose not to claim the AIA, have already used your AIA elsewhere, or the AIA is denied (for example on a connected-party purchase, below). The 14% main-pool rate took effect from April 2026, reduced from the old 18% by Finance Act 2026 s.28, which substituted "14%" for "18%" in s.56 of the Capital Allowances Act 2001. The change applies for corporation tax from 1 April 2026 and for income tax from 6 April 2026 [5].
Worked example 2, the 14% fallback. Ben buys a used van for £15,000 and does not claim the AIA on it. In year one he claims 14% of £15,000, which is £2,100. In year two he claims 14% of the reducing balance of £12,900, which is £1,806. The relief continues at 14% of the falling balance each year, so it takes many years to write the cost down fully. That is why most landlords with enough profits prefer the AIA.
Worked example 3, the straddling-period hybrid. If your accounting period spans the rate change, one period uses a blended rate. Finance Act 2026 s.28 sets a time-apportioned hybrid for a period that begins before and ends on or after the relevant day, found by adding (18 multiplied by the days before the change divided by the total days in the period) to (14 multiplied by the days on or after the change divided by the total days), rounded up to two decimal places. For a company with a year to 31 December 2026, roughly 90 days fall before 1 April 2026 and 275 after, giving a hybrid of about (18 × 90/365) + (14 × 275/365), which is approximately 14.99% for that one transitional period. Periods that start on or after the change use the clean 14%. For the full rate mechanics see our guide to writing-down allowance rates.
The cash basis trap: when you cannot claim capital allowances on a van at all
On the cash basis you do not claim capital allowances on a van at all. This is the trap that catches sole-trader and partnership landlords most often, because the cash basis is now the default method for most unincorporated property businesses, not an option you have to elect into. Under Capital Allowances Act 2001 s.1A, a person carrying on a business on the cash basis "is not entitled to any allowance or liable to any charge under this Act" except, by subsection (4), in respect of cars. The effect is counter-intuitive: a car stays inside the capital allowances regime, but a van drops out of it entirely.
That does not mean the cost is lost. The van's purchase price is relieved instead as cash basis capital expenditure under ITTOIA 2005 s.33A, deducted in the cash computation in the period you pay for it, with cars again carved out at s.33A(4)(c) so they stay in the allowances regime [7]. The route is different but a wholly business van still gets full relief.
Worked example, the cash basis van. Erin runs a small portfolio on the cash basis, the default for her turnover. In May 2026 she pays £10,000 for a used van used only for the lettings business. She does not, and cannot, claim the AIA or a writing-down allowance on it. Instead she deducts the £10,000 as a cash basis expense in 2026/27, the year she pays. The relief is broadly the same size as a 100% AIA claim, but it lives in the cash computation, not in a capital allowances pool, which also means there is no pool to generate a balancing charge when she later sells the van (the sale proceeds are simply taxed as a cash receipt).
So the first question for any van is always which basis you are on. On the cash basis the AIA and WDA sections above do not apply: you deduct the cost as cash basis capital expenditure. On the accruals basis (the traditional method, and the basis most companies and larger portfolios use) the AIA and WDA rules are the ones that matter. Knowing the basis before you work out the treatment is essential, because the mechanics, and the later-sale consequences, are genuinely different.
Buying a used van from a relative or your own company
Buy a used van from a connected person and the AIA and first-year allowances are denied; the van falls to the 14% writing-down pool. Hold on to that, because it is where the old advice "you can only claim market value" goes wrong. The real rule is in the anti-avoidance regime at Capital Allowances Act 2001 ss.214 to 218. Section 214 applies where you (the buyer, "B") enter into a relevant transaction with a seller ("S") and "B and S are connected with each other". Where it applies, s.217 provides that "no annual investment allowance or first-year allowance is to be made in respect of B's expenditure under the relevant transaction" [6].
In plain terms: if you buy a used van from a connected person, you cannot claim the AIA on it, and you could not have claimed a first-year allowance anyway because the van is second-hand. What you can still do is put the van into the main pool and claim the 14% writing-down allowance over time. You are not blocked from relief; you are pushed onto the slower route.
Who counts as a connected person comes from CTA 2010 s.1122, and the list is wider than most people assume:
- Your spouse or civil partner.
- A relative, meaning a parent or grandparent, a child or grandchild, or a brother or sister (and your spouse's relatives too).
- A business partner, and that partner's spouse and relatives.
- A company you control, on your own or together with connected persons.
- A trust where you, or a person connected with you, is a beneficiary.
Worked example 4, connected-party purchase. Carol buys a van from a company she controls for £12,000. Because she and the company are connected, the AIA is denied. The £12,000 goes into her main pool and attracts the 14% WDA, so she claims £1,680 in year one and 14% of the reducing balance thereafter, rather than the full £12,000 up front.
Do not confuse the buyer-side denial with the seller side. The connected-party denial of AIA and first-year allowances under ss.214 and 217 is what hits you as the buyer. There is a separate, later rule on the seller's side: when a connected seller disposes of plant below market value, s.61 substitutes market value as the disposal value the seller brings into account. They are different mechanics at different stages, and conflating them is a common source of error. If you are buying from someone close to you, or from a business you are involved in, assume the connected-party rule may apply and get the treatment confirmed before you complete.
Selling or scrapping the van later: balancing charges
If you claimed 100% through the AIA and later sell the van, the proceeds can trigger a taxable balancing charge. Generous up-front relief has a tail. When you dispose of the van (a sale, a part-exchange, scrapping it, or simply taking it out of the business), the sale proceeds become a disposal value in your capital allowances pool. That disposal value is capped: under Capital Allowances Act 2001 s.62 you never bring in more than the qualifying expenditure you originally incurred, so a van that goes up in value cannot produce a disposal value above its cost [8]. The disposal events and the values to use are set out in the s.61 table, with the s.62 cap sitting over the top of it.
If you had already claimed 100% through the AIA, there is little or no remaining pool value to absorb that disposal value, so it can create a balancing charge, which is a taxable addition to your profits for the year of disposal, broadly reversing the part of the relief that the sale proceeds represent.
Worked example 5, the balancing charge. Three years after fully relieving a used van through the AIA, Dan sells it for £4,000. Because the van's cost was already written off in full, the £4,000 of proceeds is brought in as a disposal value (within the s.62 cost cap, since £4,000 is below what he paid) and produces a balancing charge of about £4,000, taxed as part of his property profits that year. This is the "free 100% now, partly clawed back on sale" point that most competitor guides leave out entirely.
It does not make the AIA a bad idea, but it should shape your replacement planning. If you part-exchange the old van against a new one, the part-exchange allowance is the disposal value of the old van, while the new van starts its own relief story (full expensing or the 40% allowance if it is genuinely new, the AIA if it is itself second-hand). Timing the disposal and the replacement in the same period can let the new van's relief soak up the balancing charge from the old one, which is exactly the kind of sequencing worth planning rather than stumbling into.
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Is a used van better than a used car for tax?
For capital allowances, a used van beats a used car comfortably. A van is not a car, so it qualifies for the AIA and its 100% first-year deduction. A car is excluded from the AIA (General Exclusion 2) and from the 40% first-year allowance, and the only car first-year allowance is the 100% relief for new, unused zero-emission cars, which a used car obviously cannot meet. A used car therefore gets no first-year relief at all and simply goes into a pool for writing-down allowances: 14% a year in the main pool if its CO2 emissions are 50g/km or below, or 6% a year in the special rate pool if they are above 50g/km. The table below sets the vehicle types side by side.
| Vehicle | AIA (100%)? | 40% FYA or full expensing? | Pool and WDA rate if no first-year relief | First-year outcome |
|---|---|---|---|---|
| Used van | Yes | No (new and unused only) | Main pool, 14% | 100% via AIA |
| New van | Yes | Yes (full expensing if a company, 40% FYA if not) | Main pool, 14% | 100% (or 40%) in year one |
| Used car, 50g/km or below | No (cars excluded) | No | Main pool, 14% | Slow write-down only |
| Used car, above 50g/km | No (cars excluded) | No | Special rate pool, 6% | Slowest write-down |
| New zero-emission car (0g/km) | No (cars excluded) | 100% FYA (s.45D) | n/a | 100% in year one (cars exception) |
So a used van gives you a 100% AIA deduction, while a used car gives you a slow 14% or 6% write-down. The real risk is misclassification. HMRC can treat a dual-purpose vehicle, such as a double-cab pickup or a large car-derived SUV, as a car rather than a van, which would collapse the favourable treatment to the slow car route. The classification turns on payload and construction, not on the badge, so check it before you rely on the van rules. For the car side of this, see our guide to the writing-down allowance on cars.
Sole trader, partnership or limited company: which route for a used van
For a second hand van the answer is unusually consistent across structures, because the two reliefs that differ by structure (full expensing and the 40% allowance) are both off the table for a used asset.
- Sole traders and partnerships: the AIA (100%) is available on the accruals basis, with the WDA (14%) as the fallback. On the cash basis there are no capital allowances on a van; the cost is a cash deduction instead.
- Limited companies: the AIA (100%) is available in the same way. Full expensing and the 40% allowance are not, because the van is second-hand. Related companies in a group share a single AIA limit, so plan group purchases together.
The structure question really only changes things when you are buying a new van, where companies have full expensing and others have the 40% allowance. If you are weighing up incorporating your portfolio for wider reasons, the trade-offs sit in our buy-to-let limited company guide.
Apportioning for private use and record-keeping
If the van is used wholly and exclusively for the property business, you can claim in full. If you also use it privately, you must restrict the claim to the business-use proportion. For example, if 8,000 of 10,000 annual miles are business journeys, you claim 80% of the cost. The "wholly and exclusively" test and any private-use adjustment are matters HMRC will look at on enquiry, so the evidence matters.
Keep the purchase invoice and proof of payment, a record of the van's classification as a commercial vehicle (the V5C and the manufacturer's payload figure help here), and a contemporaneous mileage log recording the date, purpose and miles of each business trip. A simple spreadsheet or a mileage app is enough. Without this, HMRC can reduce or reject the claim, and the apportionment is exactly the kind of detail an enquiry tends to focus on. The van sits alongside the rest of your running costs, fuel, insurance, servicing and repairs, which are revenue deductions rather than capital allowances; our complete list of landlord tax deductions covers how those fit together.
One more record-keeping point now matters in practice: Making Tax Digital for Income Tax is live, phasing in from 6 April 2026 for landlords with qualifying income over £50,000, 6 April 2027 at £30,000 and 6 April 2028 at £20,000. If you are in scope you will be keeping digital records and filing quarterly, so a clean digital trail for the van purchase and its business-use apportionment is no longer optional housekeeping, it is part of staying compliant.
Common mistakes landlords make
- Claiming full expensing or the 40% allowance on a used van. The single biggest error. Both require an unused asset, so a second hand van is excluded from both. Use the AIA for the 100% instead.
- Claiming capital allowances on a van while on the cash basis. Under s.1A you cannot; cars are the only carve-out. The van's cost is a cash deduction, not a capital allowance.
- Mis-stating the connected-party rule as "claim limited to market value". The actual effect (ss.214 and 217) is that AIA and first-year allowances are denied and the van falls to the 14% pool.
- Forgetting the balancing charge on sale. A van fully relieved through the AIA can generate a taxable balancing charge when you sell it.
- Using the old 18% writing-down rate. The main-pool rate is 14% from April 2026 (Finance Act 2026 s.28).
- Confusing Section 24 with capital allowances. Section 24 is finance-cost relief on mortgage interest. It has no bearing on van capital allowances.
How a property accountant helps
The 100% headline on a used van is the easy part. The cost of getting it wrong lives in three forks: claim the AIA when you are actually on the cash basis (and lose the claim while overstating relief elsewhere), miss the connected-party denial when you buy from your own company (and face an enquiry adjustment), or forget the balancing charge and under-declare on a sale. An adviser who only works with landlords spots which fork you are on before the return goes in, not after HMRC asks.
If you want the van treatment confirmed alongside the rest of your property tax position, we can review the claim before you file. It sits within the broader capital allowances on property picture if you are also looking at fixtures and integral features in the let homes themselves.
Sources
- gov.uk: Claim capital allowances: Overview - GOV.UK
- legislation.gov.uk: Capital Allowances Act 2001 s.45S, full expensing (unused and not second-hand, companies)
- legislation.gov.uk: Finance Act 2026 s.29, 40% first-year allowance (new s.45U CAA 2001)
- legislation.gov.uk: Capital Allowances Act 2001 s.51A, Annual Investment Allowance (£1,000,000)
- legislation.gov.uk: Finance Act 2026 s.28, main rate of writing-down allowances (14%)
- legislation.gov.uk: Capital Allowances Act 2001 s.217, no AIA or first-year allowance on connected-party acquisitions
- legislation.gov.uk: Income Tax (Trading and Other Income) Act 2005 s.33A, cash basis capital expenditure (cars carved out)
- legislation.gov.uk: Capital Allowances Act 2001 s.62, general limit on the amount of disposal value (capped at original cost)