Asset vs Expense question on >£2k invoice

[zerosum]

On the FRS scheme. Considering purchasing a phone and laptop as part of one invoice, which would be over £2k.

I will almost certainly upgrade the phone (but not the laptop) before three years has elapsed.

Does this cause any difficulties for example with reclaiming the VAT, given that one part of the invoice should be classed as an asset and depreciated, while the other is probably better classed as an expense?

I suppose they could both be classed as assets and if I sell the phone, I just make an appropriate repayment of VAT and corp tax...

[DimPrawn]

Waiting for you know who to reply with:

"Have you asked your accountant?"

[zerosum]

It's a weekend...

[northernladuk]

It's a weekend...

You don't know me very well do you

Oh you mean your accountant.. Doh

[northernladuk]

We've had discussions on here that items up to 500 quid can be expensed including phones but oddly my last 2 accounts always move them in assets.

I'd say you just deal with them as assets and when the time comes you just sell the phone to yourself at a reasonable market cost and everything is hunkey dorey.

[SueEllen]

I brought an interim phone before the phone I wanted keep out a few years ago. When I looked to selling it to myself the second hand value was £30.

[TheCyclingProgrammer]

They are both capable of being treated as assets so go for it. Just make sure you treat them as capital assets in your accounts. Even if you've previously treated a phone as an expense I don't think anyone would bat an eyelid at capitalising this one.

Remember you need to account for VAT on them in normal way (outside the FRS) if you ever sell them.

[chopper]

I suppose there is a reasonable likelihood that you wont be using FRS after April 2017 anyway? ;-)

[TheCyclingProgrammer]

I suppose there is a reasonable likelihood that you wont be using FRS after April 2017 anyway? ;-)

Indeed.

[zerosum]

I suppose there is a reasonable likelihood that you wont be using FRS after April 2017 anyway? ;-)

Right. Not thrilled about that change, though I suppose one good side is that it won't be necessary to mess around trying to aggregate such purchases onto one invoice in order to deduct VAT. I can't see that it will change anything with the scenario I originally described, though?