Depreciation of company PCs etc

[psychocandy]

Closing down limited for now (Inside IR35 PC via umbrella) and have to deal with depreciation of company owned PCs. Account has asked me to decide....

Got a laptop from 2014 and a desktop from 2016. What sort of percentages should I be using for current value?

Whats best approach?

[northernladuk]

You could..

A) Check eBay and other sites for the going price.
B) Tell him they are so old they aren't worth anything.
C) Thrash about on an Internet forum.

One of those isn't a very good idea.

[ladymuck]

First off, is the equipment listed as an asset on your books? Have you been depreciating it since purchase? Over three years is normal.

Then you need to determine if there is any residual value on your books vs market worth. A comparison against ebay or other second hand retailers will give you an idea.

You tell your accountant you're buying the kit off the company for the value your research has determined. YourCo ought to invoice you for the sale of the asset.

The accountant enters the relevant journals.

[MB2]

We use 33% a year over 3 years for PCs but if a liquidation then 2nd hand value is fair - presumably you are going to buy it from the company ? In which case I would get a quote from someone who buys old IT kit and provided you pay that it I don't see a problem. You could possibly justify a little less for a "safe sale" or insist on a quote "cash up front" ?

[northernladuk]

I don't understand why the accountant isn't providing you guidance on this.

[psychocandy]

We use 33% a year over 3 years for PCs but if a liquidation then 2nd hand value is fair - presumably you are going to buy it from the company ? In which case I would get a quote from someone who buys old IT kit and provided you pay that it I don't see a problem. You could possibly justify a little less for a "safe sale" or insist on a quote "cash up front" ?

Yeh I was thinking laptop over 3 years old so zero. PC is just over a year so I was thinking maybe 50% what I paid for it.

Is there any comeback if you don't get this right? i.e. what is seen as taking the p*ss? It doesnt affect CT anyway though does it?

[Lance]

Closing down limited for now (Inside IR35 PC via umbrella) and have to deal with depreciation of company owned PCs. Account has asked me to decide....

Got a laptop from 2014 and a desktop from 2016. What sort of percentages should I be using for current value?

Whats best approach?

2014 laptop is worth nothing as you should have depreciated it already.
2016 desktop..... pick a price you like. You’re the desktop support specialist so who can argue with your valuation?

[northernladuk]

You need to be investigated which isn't likely to happen and then it would have to be a blatant piss take to ping on their radar. It's peanuts in the bigger scheme so just do it properly and sleep at night.

[SeanT]

Laptop is worth SFA as it's three years old, desktop is worth about £100 because what's one of those!

[TheCyclingProgrammer]

First off, is the equipment listed as an asset on your books? Have you been depreciating it since purchase? Over three years is normal.

Then you need to determine if there is any residual value on your books vs market worth. A comparison against ebay or other second hand retailers will give you an idea.

You tell your accountant you're buying the kit off the company for the value your research has determined. YourCo ought to invoice you for the sale of the asset.

The accountant enters the relevant journals.

Assuming the hardware is worth anything significant, this probably isn’t the most tax efficient approach AFAICT.

If you buy them, then the company will have to pay a balancing charge on the sale of the asset before the remainder is distributed as capital subject to CGT.

I believe as OP will receive any assets as part of the capital distribution and any value will be used to calculate the capital gain charge that buying them is pointless.

Unless I’m missing something?