Do small (&cheap) tools go in expenses?

[ExtremeFlamingo]

Just wondering if anyone can answer this question for me. I run micro craft business and so have small tools such as jewellery pliers and sewing needles etc, but I don't know where to include them in my accounts - they seem too small and insignificant to go into capital allowances. If they do go into expenses, what do they go under? And would the same apply to items such as a desk lamp?

 

[JBlack]

I am not an accountant, and I am not advising you. Just telling you what I do myself in somewhat similar circumstances...

I use certain low value items in my business too, and I put them under the "cost of sales" category in my online accounting package. I am following advice that the makers of the package give, the same advice I have seen other people giving online, that in general anything under £500 net should be profit & loss, not go on the balance sheet as an asset.

 

[kevin.doran]

It a depends on the size of your business obviously, £500 is a lot to one man yet pocket change to another.

In principle I agree though, those small items might as well be expensed through the P&L and the £500 rule seems fair for many SME's.

 

[JBlack]

Yes, scale is a very good point. £500 might be too high an arbitrary figure for you, and it might be for me too, but as it's such a commonly used figure I'm hoping I'll get away with it if & when the time comes.

Whether that or a lower figure would be a suitable benchmark for your business, the sewing needles should definitely be expensed, as should the jewelery pliers unless perhaps they are some sort of specialist item much more valuable than ordinary pliers...?

I know that some hairdressers use specialist scissors that costs hundreds of pounds, and they should probably be classed as assets, but if your pliers cost under say £100 then I would definitely expense them.