Capital Expenditure - feels like im drowning

[d3zr4]

Can someone help me please?

Im just doing my Tax Return for this 08-09 (having traded now for around 1 1/2 years (2nd Return)) and am confused about capital expenditure as previously I have just put my profit/loss.

My earnings are extremely low for this tax year (recession etc) but am wondering about whether I should put some items under capital expenditure. Basically for the last year and a half Ive been a market trader selling my own clothes and jewellery and now selling cosmetics (as I would like to concentrate on my website which will exhibit/sell my jewellery).

I use a credit card machine (mobile handheld in the market) - does this count as a capital expenditure? Can I put all the costs, ie. bank charge activity fees and line rental fees, as capital expenditure?

I also have a website up (but not running as yet) - does this also count as capital expenditure (even though IP would be an intangible asset)? Will all the costs for running this site and future costs of building it count as capital expenditure.

Also, Ive read on other discussions how most advise that an item under £200 for a sole trader is probably not worth putting as a capital expenditure - so now for 09-10, Im just going to put items over £200? Im just slightly lost as accounting is so not my thing but i dont understand how "capital expenditure" benefits me. I understand its an asset thing and its worth something but what makes it different from an expense?

thank you

[elainec100@cheapaccounting]

From a very brief scan of your post a lot of what you are describing is not capital expenditure at all.

Have a read of the notes to the self employments self assessment here - see costs and capital:

http://www.hmrc.gov.uk/worksheets/sa103f-notes.pdf

[Maslins]

I understand its an asset thing and its worth something but what makes it different from an expense?

Your comment re: bank charges/line rental being capital expenditure suggests you don't :(

Very simply, an asset which should get capital expenditure rather than be expensed is most likely to be a physical item that you'll still be using in a couple of years time.

This quite possibly could include your credit card machine...although I thought most of these things were provided by Streamline/whoever? If you bought it for £200/£500/whatever, then it's capital expenditure. If Streamline effectively lend it to you whilst you use their services, and incorporate the cost of it in their monthly fee, then the monthly fee is an expense, but you don't have any capital expenditure here.

Websites are a bit of a funny one. I think the basic distinction tends to come down to whether people can order online or not. If people can buy directly from your website, then you can typically capitalise it. If the website is simply an online brochure for your services, then you should just expense the cost. Given the current AIA this makes no difference at the end of the day anyway!

[d3zr4]

Thank you both for your replies. I bought the card machine from my bank's, HSBC, machine people outright for £713. I think from both your comments, I will just put everything as an expense for the mo until my empire is built and have a few more pennies :).

Many thanks

dezra