Expensing multiple laptops

[PK2]

agreed.

It needs disposing of. And if disposing of it means it has been sold personally that needs to be handled correctly.

Once my older laptop is no longer needed I email the accountant "device xxxx has aged beyond it's useful lifetime and has been recycled".

Yea exactly! It's not about me expensing or writing off multiple laptops to gain the system, give them away, etc.

I wanted to know simply what would happen if I were to expense my work laptop now but later decided to upgrade and wanted to convert this one back to personal needs, or sell it on eBay.

The title is a bit misleading.

[Lance]

He is over complicating it but I don't think that is the right answer. For a start you saying lie to your accountant and he can't do what he pleases. Just because it's depreciated on the books doesn't mean it's worthless. I think you have gone 180 and are over simplifying it there.

agreed.

It needs disposing of. And if disposing of it means it has been sold personally that needs to be handled correctly.

Once my older laptop is no longer needed I email the accountant "device xxxx has aged beyond it's useful lifetime and has been recycled".

[northernladuk]

You're overcomplicating it. Just keep it as a company asset. Once it's depreciated, take it out of the books (i.e. tell you accountant it's not used anymore, broken, etc.) Now you can do with it what you please.

He is over complicating it but I don't think that is the right answer. For a start you saying lie to your accountant and he can't do what he pleases. Just because it's depreciated on the books doesn't mean it's worthless. I think you have gone 180 and are over simplifying it there.

[Pondlife]

If your missus/the kids need a laptop, just get them (ie personally buy) some entry level jobby from currys and stop complicating things.

[zonkkk]

You're overcomplicating it. Just keep it as a company asset. Once it's depreciated, take it out of the books (i.e. tell you accountant it's not used anymore, broken, etc.) Now you can do with it what you please.

[edison]

That has made it a lot clear, thanks. I have heard some time ago that computers are subject to a 3 year depreciation rule, and I still have my old 4-year old laptop I've expensed back in the day but now it's used for personal needs and I didn't sell it back to myself or anything like that.

Depreciation only applies to assets and your accountant should work out what type of depreciation it is (straight line, reducing balance etc.)

Some of my accountants have had different views on what could and couldn't be classed as an asset for depreciation, partly based on what seemed like an arbitrary value of £1000.

[Lance]

How is it cheeky if I literally need this poor laptop for my work and (like suggested by the other), I expense it at a fair market value, then some time later decide I need to upgrade to a better one for work, so sell this one back to myself at a fair market value so I can use it personally again, give it away, sell on eBay, etc.

But I guess it'll be more of a headache with double VAT so probably not worth it; I'll just upgrade to a new one and buy that straight from the company.

you know that a company owned laptop can be used for personal purposes don't you?

[PK2]

In short, stop passing the laptop back and forward between you/your Ltd Co. Possibly you think you're being clever as you can be cheeky with the price each time so your business rather than you suffers most of the depreciation...but you're creating headaches all round, and will lose out too due to VAT on each sale.

How is it cheeky if I literally need this poor laptop for my work and (like suggested by the other), I expense it at a fair market value, then some time later decide I need to upgrade to a better one for work, so sell this one back to myself at a fair market value so I can use it personally again, give it away, sell on eBay, etc.

But I guess it'll be more of a headache with double VAT so probably not worth it; I'll just upgrade to a new one and buy that straight from the company.

[PK2]

You need to get a better accountant. How do you pay it back to the company? Seriously, if your accountant isn't providing the service you pay for get a new one. We've quite a few people on here struggling with crap accountants and those that have made the move have never looked back. Don't put up with shoddy accounting services that leave you having to ask simple questions of your peers. It's not a good place to be in. Remember we are all just contractors on here, granted some with an excellent grasp of their accounts but still contractors none the less. You pay good money for your services, go somewhere that you get what you pay for. You'll thank me when you have and it's going well.

Well, I already switched some time ago, but every new accountant seems to forget about you with time. Also it got a lot more difficult to get in contact with them after COVID happened. Dread having to go through this again

[Maslins]

How would you pay the money back to the company? Would you tag it as non-VATable income (I'm VAT-registered, but obvioustly I've already paid the VAT through my personal purchase).

I'm afraid having already paid VAT is irrelevant here, and proceeding as you suggest will lead to repeated VAT hits.

Remember you and your Ltd Co are separate legal entities. Your Ltd Co is VAT registered. You personally are not. Hence:
- you buy the laptop (initially) for your personal needs. Presumably the vendor charged VAT, but you personally have no ability to reclaim this. You suffer the gross cost (no different to anyone else buying something for personal usage).
- you sell the laptop to your Ltd Co. You personally are not VAT registered, so you don't charge VAT here.
- your Ltd is VAT registered, but it wasn't charged VAT by you, so there's no VAT for it to reclaim.
- your Ltd is now seemingly selling the laptop back to you. Your Ltd is VAT registered, so it must charge VAT on the sale, which you can't reclaim.
You could repeat this if you liked, but there will be a VAT hit each and every time.

In short, stop passing the laptop back and forward between you/your Ltd Co. Possibly you think you're being clever as you can be cheeky with the price each time so your business rather than you suffers most of the depreciation...but you're creating headaches all round, and will lose out too due to VAT on each sale.