How to claim cost of laptop on HMRC online corporation tax return/accounts submission

[aramando]

Hi, I have looked for an existing answer to a question like this, but apologies if this has been addresed before.

I am (perhaps foolishly) doing my own accounts again for the 2nd year running. I managed fine last time, but this year the business laptop I purchased from my ltd company's funds is messing things up and I can't get the balance sheet to tally with the profit & loss account.

I have added the full £1649 cost of the laptop to the "cost of sales" section in P&L to claim it as a tax-relieved business expense, and added it as a fixed asset on the balance sheet. Unfortunately the latter change causes the total net assets to exceed the P&L running total by the value of the laptop. Any idea what I'm doing wrong?

[WTFH]

It's not a "cost of sale" but a purchase.

[ladymuck]

It should be in an overheads type account like office costs, or consumables.

If it had been an expensive laptop, I would have put it in an asset account and set up three year depreciation but that's overkill for the amount you spent.

My journal would have been:
CR bank
DR office costs

Simples.

[northernladuk]

Get an accountant.

[northernladyuk]

Get an accountant.

And then ask your accountant.

[TheCyclingProgrammer]

IMO you should be treating this as an asset. It's not a cost of sale. You would need to claim capital allowances.

A goodf accountant will show you how to do this.

[Michael at BI Accountancy]

IMO you should be treating this as an asset. It's not a cost of sale. You would need to claim capital allowances.

I agree, add in as an asset and then claim AIA.

Don't forget to also put depreciation in the accounts for the asset.

[ladymuck]

I get where you're coming from on the asset front but I took my accountant's advise that low value purchases just aren't worth it. The depreciation isn't CT allowable. I stick things on the asset register when they hit about £2k but that's a limit which works for me, and keeps the depreciation admin down, whereas a lower limit might be better for others.

[stek]

Remember the machine that goes bing on The Meaning of Life?

[northernladuk]

I get where you're coming from on the asset front but I took my accountant's advise that low value purchases just aren't worth it. The depreciation isn't CT allowable. I stick things on the asset register when they hit about £2k but that's a limit which works for me, and keeps the depreciation admin down, whereas a lower limit might be better for others.

And that's what I thought. Not the advise bit of course, but oddly enough both accountants moved sub £500 purchases to assets in the two cases I can remember.