Business expenses

[Mr.P]

Hi,

Im looking to buy an Ipad2 or maybe a new laptop.

Can it be classed as a business expense? After all it is making my work more accessible

 

[Scalloway]

If you use it for work the work percentage is allowable for tax through Capital Allowances.

 

[Charles Accountancy]

Are you structured as a Limited company or a sole trader?

What type of industry do you work in?

 

[Mr.P]

Are you structured as a Limited company or a sole trader?

What type of industry do you work in?

Telesales, homebased with occasional use of offices through Regus.

Sole Trader.

My accountant seems to think it's OK

 

[elaine@cheapaccounting]

The likelihood is that you will have some personal use and you should allow a percentage of that off of the business cost.

I would put this through the profit and loss account as likely to be less than £500. Really not worth capitalising as a fixed asset.

I guess I would get your accountant to deal with it in the accounts.

 

[MyAccountantOnline]

My accountant seems to think it's OK

Hopefully you trust your accountants professional opinion?

 

[TimCaprica]

The likelihood is that you will have some personal use and you should allow a percentage of that off of the business cost.

I would put this through the profit and loss account as likely to be less than £500. Really not worth capitalising as a fixed asset.

I guess I would get your accountant to deal with it in the accounts.

What do the accountants on here normally use as a threshold for capitalising? £500 just surprised me, when I used to audit BIG companies they normally had policies of less than that.

 

[elaine@cheapaccounting]

Amongst many other but just an as an example - two things that I consider:

- common sense approach based on application of AIA would give a net tax result of zero in such small cases

- the useful life of assets. These days what is the NRV of a e.g. a laptop or such like after a year

Depends on size of business of course but I generally consider £500 (in this day and age and with AIA) not to be an unrealistic capitalisation limit and a level at which any common sense gifted person would find hard to challenge in terms of suitable tax treatment of assets.

Of course this is just my opinion.

 

[David Griffiths]

What do the accountants on here normally use as a threshold for capitalising? £500 just surprised me, when I used to audit BIG companies they normally had policies of less than that.

Was that in £-s-d? (and, yes Elaine, I do remember it, and even having to prepare accounts in it although I was in university when it disappeared)

We had a client taken over by a subsidiary of a plc about ten years ago, and I continued to deal with the management accounts for about two years until they got their act together. Their cut-off for caplital expenses that long ago was £10,000. Trying to maintain an asset register with desks and other equipment costing a couple of hundred pounds would be a nightmare for a big organisation.

 

Hi,

Im looking to buy an Ipad2 or maybe a new laptop.

Can it be classed as a business expense? After all it is making my work more accessible

Completely unrelated to the subject but it looks Apple are launching iPad3 on 7th March. I don't know what UK availability will be but you might want to hold off buying an iPad2.

http://www.guardian.co.uk/technology/2012/feb/14/ipad-3-launch-7-march

p.

 

[Scalloway]

I seem to recall that HMRC officially have a start point of zero for capitalisation. I was told though by an HMRC official at one of their courses that they would consider £250 as a de minimis for not capitalising.

 

[elaine@cheapaccounting]

I guess it would only be the most fool hardy and stupid of HMRC representatives to pursue a case of mis-capitalisation with a nil net tax result given AIA.


Mind you these days you can never be sure what could happen.


Personally I never rely on anything an HMRC rep tells me - prefer to rely on the actual law and when it isn't specific then interpretation is required backed up by a logic case.


Logic and common sense goes a long way in my book.

 

[TimCaprica]

Yes I was told HMRC have a de-minimis of nil!

But I guess the AIA is a relatively new thing.

I don't think it's that hard for a plc to maintain a huge register though if they are using Oracle or SAP it really should be able to cope. It's not that much harder to deal with than hundreds of thousands of sales.

Anyway this has got very off topic ....