Second Hand Goods

smoove · Feb 3, 2009

How are second goods looked at when accounting, could I purchase a laptop second hand as a business expense? Obvisouly it would be without an original purchase receipt, as it will be from another person.

JulianHobbs · Feb 3, 2009

Assuming you will use the laptop in your business, then yes you can buy it as a business expense. The cost or 'carrying value' of the laptop for your business (ie an asset on your balance sheet) will be the purchase price YOU paid for the second-hand machine.

Just make sure you get a receipt from the seller stating what the item is and the amount paid. You will need this for your business records. Obviously if you are buying from another person, there will likely be no VAT to worry about either.

Julian Hobbs,
Chartered Accountant

KidsBeeHappy · Feb 3, 2009

Just get some kind of proof of purchase, and i would recommend paying by cheque rather than cash because it's just an extra bit of paper in the paper audit trail that inspectors just love (should they ever visit or enquire).

smoove · Feb 4, 2009

Well, I would be purchasing the laptop through Paypal, would the paper trail (printout) that they provide be enough, combined with a receipt from the seller? The money to pay for it will be coming from my personal account, as there as no business funds, as it has not yet started.

KidsBeeHappy · Feb 4, 2009

Perfect! No arguments there.

Emily Caver · Feb 5, 2009

Hi forum:
In my opinion second hand goods are a good option for saving money nowadays, if the laptop´s brand is well known you should make your buy.
Emily Caver
Designer
Tokyo

nasirs · Feb 5, 2009

As you asked about the business expense, it will not be an expense but will be classed as an Asset as mentioned by Julian above. You could claim capital allowances on it (refer an accountant for this for more details)

Also, may be it is not what you asked but I guess I should tell you ( i am sure that you already knew) that if you are paying it from your personal account then keep a record as Director Loan in your books.

Jenni384 · Feb 5, 2009

Just want to add one thing:
Technically it's an asset, but if it costs less than £300 you are within your rights to put it through the books as a revenue expense in the profit and loss account, you don't have to capitalise it.

But yes, proof of purchase through paypal is just fine

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Second Hand Goods

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