Motor trades
Accountants for Breakdown and Vehicle Recovery Businesses
Motor Trade Accounting helps breakdown and vehicle recovery operators across the UK find specialist accounting and tax support. Get advice that understands expensive trucks, unsocial hours and customers who pay on very different terms.
A business built on heavy kit and long nights
Recovery work ties up a lot of money in vehicles before a single job is done. Slide beds, spec lifts and heavier recovery trucks are usually bought on hire purchase or lease, and each finance route is treated differently in the accounts and for tax. Fuel, tyres, insurance and maintenance then run at a level few other motor trades see.
Income comes from several directions at once. Some jobs are paid at the roadside by private motorists, others come through motoring organisations, insurers, fleet managers, police removal schemes or local garages, each with their own rates, paperwork and payment terms. Storage charges for vehicles held in the yard add another stream. Keeping track of who owes what, and chasing it, is a job in itself.
A specialist motor trade accountant brings that together into clear accounts, makes sure capital allowances on trucks and equipment are claimed properly, and helps you see which contracts actually make money once fuel, wages and wear are counted.
What specialist support covers
Support is shaped around the costs and income patterns of recovery work.
- Vehicle finance treatmentHire purchase, finance leases and contract hire recorded correctly, with capital allowances or rental costs claimed in the right way.
- Agency and contract incomeStatements from motoring organisations, insurers and fleet customers reconciled to jobs, so short payments and missed invoices are caught.
- Credit controlA clear picture of who owes what and for how long, with a routine for chasing slow payers.
- Driver payrollOvertime, night and weekend rates, on-call payments and holiday pay handled correctly through payroll.
- Fuel and running costsFuel cards, tyres, servicing and insurance coded properly so the cost of running each truck is visible.
- Storage and salvage incomeYard storage fees and any salvage or scrap income recorded and accounted for correctly.
- Accounts, tax and VATYear-end accounts, corporation tax or self assessment, and VAT returns under Making Tax Digital.
What to plan for
These points shape both your tax position and your cash flow.
Replacing trucks
Plan vehicle replacement ahead so finance, capital allowances and cash flow line up, rather than buying in a hurry after a breakdown of your own.
Licensing and compliance
Depending on vehicle weight and how they are used, operator licensing, drivers' hours and tachograph rules may apply. Check the position with DVSA and the Traffic Commissioner.
Payment terms from big customers
Agency and insurer work can be paid well after the job. Know the terms before you rely on the income to cover wages and fuel.
Scrap and salvage
If you buy or sell scrap vehicles or metal, a licence from the local council may be needed, and buying scrap metal for cash is not allowed.
Good to know
Recovery trucks are not cars for tax
Commercial recovery vehicles usually qualify for the annual investment allowance, which can let the full cost be deducted in the year of purchase.
Hire purchase and leasing differ
On hire purchase you can normally claim capital allowances on the vehicle. On most leases you claim the rental payments instead.
Recovery services are standard-rated
Once VAT registered, VAT is due on recovery charges, and on most storage fees too, so make sure invoices and agency statements show it correctly.
Self-employed drivers need care
Drivers who work your shifts, in your trucks and under your direction may well be employees, whatever the paperwork says.
How it works
- 1
Make an enquiry
Tell us about your fleet, your main sources of work and what you would like help with.
- 2
Discuss your operation
A specialist accountant talks through finance agreements, contracts, staffing and any backlog of records.
- 3
Receive an outline
You get a clear description of the work, the information needed and how communication will run.
- 4
Build a routine
Statements, fuel records and payroll are brought into a monthly rhythm so problems show up early.
Questions recovery operators ask
Can I claim the full cost of a new recovery truck?
Often yes, through the annual investment allowance, as long as it is a commercial vehicle and you are within the allowance. Your accountant will check the details before you buy.
How should I handle agency statements?
Match each statement to your job records and invoices. Differences should be queried promptly, as they get harder to resolve over time.
Do I charge VAT on storage fees?
Storage charges are generally subject to VAT once you are registered. Your accountant can confirm the treatment for your particular arrangements.
Is it better to lease or buy trucks?
It depends on cash flow, tax position and how long you keep vehicles. Comparing the options with real figures is the safest way to decide.
Do my drivers need to be on payroll?
If they work as employees in practice, yes. Employment status depends on how the work is done, not on what the contract calls it.
Who will I be speaking to?
A qualified accountant who works with motor trade businesses, including recovery and breakdown operators.
Get a clearer view of your recovery business
Send an enquiry and we'll arrange a conversation with an accountant who understands recovery work.