Expenses Out of Contract

**northernladuk** · 1 August 2019, 11:04

I'd say he's completely wrong. You have a company but at this point it has no clients, its' still a company that carries out business activities such as finding clients, training new skills, your books and everything you need to do as well as do billing work. You need the kit to get clients which is part of sales activities so meets the rules.

Is a shop not a shop when it has no customers in it?

I'd say swap the PC and your accountant while you are at it.

If you really are hell bent on staying with him, then buy it personally and when you get a client sell it to your company. But you don't need to.

**TheCyclingProgrammer** · 1 August 2019, 11:08

Sounds like utter bollocks to me. Tell your accountant you are an IT business and you cannot do any business at all without a contract. That you are outside of a contract is irrelevant...you're still in business, you're still looking for clients, you may choose to pursue a Plan B etc.

You won't find any HMRC documentation that says "its ok to buy a laptop when you aren't in a contract". The rule is pretty straightforward - is it "wholly and exclusively" for business purposes and if there's any personal use of the asset, is the personal use deemed "significant" or not?

Generally, this rule can be summarised as "if its obviously something you would need as a business and you cannot do your job without it, then it is allowable and any personal use would normally be deemed insignificant unless there is evidence to the contrary".

**Lance** · 1 August 2019, 11:13

Tell your accounatnt you can't pay his bills as you don't have a computer.
See if he then realises that it's a business tool.

Either way you should sack the idiot as he's an idiot.

**Invisiblehand** · 1 August 2019, 11:25

Originally posted by whatnow View Post

I've recently joined the bench and thought all this free time would be a good chance to replace my (cough) 9 year old company PC and get the new one configured.

Upon taking delivery of my new kit I was frustrated to discover that my accountant would not allow me to claim it through the company as I am out of contract. Apparently it fails the "wholly and exclusively" test as, since I have no clients, I have no need to be buying computer equipment.

This seems mad to me but I'm struggling to refute it. How can any IT consultancy company operate without any IT equipment, regardless of whether it has active clients or not? I'm obviously using it applying for work and trying to keep my technical skills up to date so seems a valid use of a modern PC.

Can somebody point to any official HMRC doc to this to show my accountant it's an allowable purchase?

Thanks!

Which firm is it?

**northernladuk** · 1 August 2019, 11:27

Originally posted by Lance View Post

Tell your accounatnt you can't pay his bills as you don't have a computer.
See if he then realises that it's a business tool.

Either way you should sack the idiot as he's an idiot.

I would, by the accountants own thinking, expect that said accountant won't be charging the OP for services while he has no client as well.

In fact paying from what? The OP shouldn't have a business bank account while he has no clients either.

**CryingSheep** · 1 August 2019, 11:39

Originally posted by Lance View Post

Tell your accounatnt you can't pay his bills as you don't have a computer.
See if he then realises that it's a business tool.

Either way you should sack the idiot as he's an idiot.

And that's why I do my own books!

**northernladuk** · 1 August 2019, 11:51

Originally posted by CryingSheep View Post

And that's why I do my own books!

Then the bottom line of the post you quoted applies...

**vwdan** · 1 August 2019, 12:11

Agree with the others, absolute crap. The fact that "start up" costs can be claimed should tell you all you need to know.

Imagine if you wanted to set up a factory, or a shop - are they saying you couldn't claim for anything until you'd served somebody? Ridiculous.

**malvolio** · 1 August 2019, 12:13

Also, can I point out that "wholly and exclusively" doesn't actually apply since you are allowed a degree of personal use of company-owned PCs, laptops and smartphones anyway.

Bottom line - move to an accountant that understands your business rather than just theirs.

Expenses Out of Contract