Can I buy a product to test it – & claim as business expense?

[toby39]

Hi folks,
I wish to buy a product, not to sell it to a customer – but to test it, to see how well it functions.

If it functions well, then i will consider selling the same model to customers (either as a retailer, or as an affiliate).

Can i buy the product using my business bank account, and claim this as a business expense?
... I run a LTD company in the UK, so i am not asking as a sole trader.

Any feedback would be much appreciated.
Thanks

 

[DontAsk]

That's what I do.

 

[Marantzdigital]

Correct me if I am wrong but; as long as it it is 'wholly and solely for business use' then it is acceptable - this was my reading on the GOV site when starting up, it's worth a quick check to confirm.

I think it would be product research, eg how can you sell something that you are not confident in or have no experience with, how would you answer sales enquiries and deal with aftersales if you or your staff have never tested the product.

That's my understanding, I may be wrong, I am far from an expert in business..

 

[Daybooks]

Generally yes provided there is a valid business intention.

 

[toby39]

... as long as it it is 'wholly and solely for business use' ...

What if it is a Health/Fitness product (that i could personally benefit from using) in which i wouldn't be able to sell this product after i had used it ... but i would be able to sell identical products (exactly the same model)?

 

[Marantzdigital]

Personally I wouldn't think twice to buy goods that I could prove if challenged were 'wholly and solely' for business use.

The goods most likely should relate to your business activities eg it might seem strange that you have purchased a gym set or an air fryer if you are a seller of toys, but again is there really a rule to say you cannot expand your range if you were a seller for example.

I couldn't answer your exact query but it's an interesting one so I will watch the thread.

 

[Marantzdigital]

I edited my reply but perhaps was too slow to submit

In my view,

Buying 1 to test then buying more of the exact item sounds like a very realistic business move.
You need a sample to try before you invest. The sample is used and not for resale, perhaps it gets damaged and disposed of.

 

[DWS]

Personally I wouldn't think twice to buy goods that I could prove if challenged were 'wholly and solely' for business use.

The goods most likely should relate to your business activities eg it might seem strange that you have purchased a gym set or an air fryer if you are a seller of toys, but again is there really a rule to say you cannot expand your range if you were a seller for example.

I couldn't answer your exact query but it's an interesting one so I will watch the thread.

You need a sample to try before you invest. The sample is used and not for resale, perhaps it gets damaged and disposed of.

This I believe is important, what happens to the product after it has been tested and a conclusion made?
If it becomes worthless then I can not see any problem, obviously this depends on what the product is, OP mentions a ‘model’ so if this is equipment I would expect it to have some sort of second hand resale value.

 

[Mark T Jones]

This I believe is important, what happens to the product after it has been tested and a conclusion made?
If it becomes worthless then I can not see any problem, obviously this depends on what the product is, OP mentions a ‘model’ so if this is equipment I would expect it to have some sort of second hand resale value.

I think there is often a gap between what people might do in the privacy of their workspace and what they offer as advice

 

[DWS]

I think there is often a gap between what people might do in the privacy of their workspace and what they offer as advice

Your point being??

 

[UK Contractor Accountant]

What if it is a Health/Fitness product (that i could personally benefit from using) in which i wouldn't be able to sell this product after i had used it ... but i would be able to sell identical products

20% of Market value when made available as a P11D benefit each year.

 

[MyAccountantOnline]

More information here if you need it on how to declare private use of company assets -

https://www.gov.uk/expenses-and-benefits-assets-bought-sold-or-given