Buying a new Laptop as business expense

[Hobosapien]

You won't be able to recover the VAT if you do that as OP is not personally VAT registered. OP could *pay* for it personally and recover the money from the business (i.e. treat it like a loan) but you'd still need to make it clear that the purchase is on behalf of the company and get a valid VAT invoice in the company name so it doesn't really gain you anything. Much simpler to just buy it through the business in the first place.

Not done it for years (while on flat rate VAT scheme) so rules may have changed or has become under more scrutiny from VAT man, but I've put through loads of expenses to recover personal cost where I've paid cash or with personal card and my Ltd reimbursed me and reclaimed the VAT where possible. This included VAT registered hotel stays while working away during the week, which sometimes made a hotel better or similar value to the grotty b&b down the road.

My accountant was happy with the records I kept and never pulled me up on it so it must have been legit.

I think as long as you can prove appropriate intent (i.e. business related) during any investigation (that may or may not happen) all will be well, one would hope.

[FrontEnder]

You won't be able to recover the VAT if you do that as OP is not personally VAT registered. OP could *pay* for it personally and recover the money from the business (i.e. treat it like a loan) but you'd still need to make it clear that the purchase is on behalf of the company and get a valid VAT invoice in the company name so it doesn't really gain you anything. Much simpler to just buy it through the business in the first place.

So all those hotels that I've paid for personally and claimed back through the business aren't VAT deductible?

[MrButton]

So all those hotels that I've paid for personally and claimed back through the business aren't VAT deductible?

There are some wires crossed I think - you can indeed claim the VAT back if purchased on behalf of the company.....

TheCyclingProgrammer was replying to the message which stated buying it as a personal asset then "transfer" the asset to the company. In this case you wouldn't be able to claim the VAT.

This is my understanding.

[TheCyclingProgrammer]

So all those hotels that I've paid for personally and claimed back through the business aren't VAT deductible?

As a general rule, you can only reclaim VAT on a purchase made in the name of the VAT registered entity. This includes an employee purchasing something on behalf of their employer if they get a valid VAT receipt or invoice in the company name or for certain small items where the intent was clearly to purchase a supply on the company's behalf:

https://www.gov.uk/hmrc-internal-man...t-tax/vit13300
https://www.gov.uk/hmrc-internal-man...t-tax/vit13400

There are some exceptions for certain types of expenses - some are listed in the link above. Travel, subsistence and accommodation are also exceptions to the rule:

https://www.gov.uk/reclaim-vat/staff-travel

If you're purchasing any significant piece of equipment (whether it's a capital asset or revenue expense) - i.e. anything other than small sundries - then you should get a valid VAT invoice in the company name.

I'm fairly sure as a result, if you purchase an asset personally, then transfer this asset to the company (or sell it to the company) then there's no VAT to recover as there is no VAT on the sale between you and YourCo, only on the original supply which YourCo was not party to.

[easybenjamins]

just to add a couple more related questions

Purchased a laptop personally, a couple of months ago (say 1500). Working on setting up the Ltd this week. Can I sell the laptop to the company, together with some accessories I've purchased from another supplier (say 300), for a total of 1800 ? Or should I apply some loss of value for the 3 months (say minus 10% based on a 3 year cycle for computers), is there a rule for this ?

What happens later, when the laptop dies or is too old to be used ? do I have to keep it around, for how long? just in case they check my books and all in a few years, to prove the asset is real ?

Last one: as an IT contractor, different clients I will work with at the same time, require working on a separate laptop (as they need to install specific security software for remote access). Can I get additional equipment covered under expenses ? of course I would make sure the wording in the contract is clear on the requirement for a dedicated asset.


Please let me know if I should post these as a separate thread, just thought it's more helpful if the discussion continues here, since the original question was already answered in great detail.

[northernladuk]

You've got to buy it at market rate obviously. Get your accountant set up and then ask them all these questions.

You could also try the search method I mention in your other thread.