Building a PC- what constitutes Capital Asset

[css_jay99]

Hi, I build a PC sometime ago.

All parts were bought at over a few weeks period with receipts. Total cost of parts came to over £1100.

Questions are :
1) Will this total constitute cost of pc as a fixed asset? (can i charge building cost as well ! )
2) will addition of memory, network switch, £120 USB HDD be expense items or capital expenditure items

3) I had to wire my house up with cat6 which cost me close to £150. Can I claim this as an expense or is it capital ?

4) can i put my home wireless connection as a business expense.?
cheers

css_jay99

[malvolio]

Hi, I build a PC sometime ago.

All parts were bought at over a few weeks period with receipts. Total cost of parts came to over £1100.

Questions are :
1) Will this total constitute cost of pc as a fixed asset? (can i charge building cost as well ! )
2) will addition of memory, network switch, £120 USB HDD be expense items or capital expenditure items

3) I had to wire my house up with cat6 which cost me close to £150. Can I claim this as an expense or is it capital ?

4) can i put my home wireless connection as a business expense.?
cheers

css_jay99

Talk to your accountant - and please don't tell me you haven't got one because they're too expensive...

However, you should capitalise equipment at cost. Components are not equipment, only working "things" are equipment, so basically it's the finished PC valued at the gross cost of its components. It dowes not include your time building it, but it would if you had paid someone else to do it. If you then significantly increase the value of an asset it can be revalued, so in that sense future upgrades can be capitalised. Again, if they cost above your capitalisation threshold you may want to capitalise them separately since they will begin to depreciate at a different point in time. There is a long-standing argument about whether or not a computer asset value includes the OS and COTS applications, since you don't actually own them, only the right to use them but the computer has no value without them. And finally if you built it a while back, you will have to write down its value at whatever depreciation rate you use to derive it's current capital value, or else you are commiting tax evasion. Simple really, isn't it?

Home improvements don't count, only office ones, since the home is yours and only the office facilities are YourCo's. You didn't have to flood wire the house, you could have just run some wire around the skirting boards. Similarly, your domestic WLAN is yours, not YourCo's, so can't be part of YourCo's assets.

But there are ways around all of this, and there are sliding scale benefits where it might be cheaper not to capitalise things. Speak to your accountant, it's what you pay them for.

[Ardesco]

I would say you could probably put the cost of the cable through your company, but not the cost of fitting it (assuming you have had it fitted).

You can argue that you need the cable to ensure an internet connection, however you didn't have to do a bunch of home improvements as well to make it look nice.

IANAA so get proper advise from your accountant etc.