Claiming back tax

[bod75]

I am an in the process of setting up a business as a sole trader.
I have been led to believe that i will be able to claim back money from paye tax, on items that i need to purchase in order to set the business up ie a van and tools etc.
Is this correct? If so how do i go about it and how long do i have to claim the money back?
Any help/advise on this will be very appreciated

[Skyline D]

Not really clear what you mean. If you are asking if HMRC will give you a refund of tax paid in the year to date now in order to pay for things then, no, not sure where you got that idea from?

If you are asking if you can claim allowance for start up costs in the new business then yes you can, though you won't see the benefit of them until you complete your first accounts and tax return based thereon.

[buildersmate]

Yes, I'd summarise the above as - you can deduct the expenses of setting up the business from the earnings you make from it - so in your first year, expenses between now and 5th April 2009 would be deducted. You then pay income tax on the net earnings (profit) you made. You will not be able to deduct the TOTAL cost of the van (because it is a capital purchase - not an expense) in that first year.