Can I claim interest on a business loan or van finance?

Can I claim interest on a business loan or van finance? Yes. Interest on money borrowed for your trade can be claimed in 2026-27, on the cash basis or traditional accounting. The old £500 cash basis cap ended from 2024-25, but repaying the money you borrowed is not a finance cost. No. The cash basis used to limit interest on loans to £500 a year. The government removed that limit from the 2024-25 tax year, so cash basis users can now claim interest in full, as long as it is for the business. Not as finance costs. GOV.UK says you cannot claim repayments of loans, overdrafts or finance arrangements. You can claim the interest if you claim the van's actual costs. The van's own cost is claimed separately: through capital allowances with traditional accounting, or as an expense on the cash basis, where hire purchase payments towards the price are deducted as you pay them. None of this applies if you use the flat mileage rate for the van. HMRC's manual says a crucial point is what the borrowed money is used for while the interest builds up. If a personal loan paid for tools or stock for the trade, the interest on it can count. If it paid for a holiday, it cannot. Read the full answer, with every source, at rightotax.co.uk.