Claiming Expenses Prior to Ltd Formation

[r0bly0ns]

during that time incurred legitimate business expenses that I could not claim under Giant (Laptop, etc.)

Spoke to the accountant. I can invoice my company for the current 2nd hand market value of the laptop.

Luckily, Apple Macs don't really go down in value that much

As you have purchased the laptop as a business expense, you should put it through the business as a business purchase from new rather than selling it second hand to the business, if you can.

As per the issues above, it's more personal income you have to report on your self assesment......

[Peter Loew]

Yes, but any tax inspector would find it impossible to believe that you would not continue to use it for personal use (unless you buy another one with your own money, which, from a tax point of view, makes no sense), and therefore you should declare it on your P11D and pay personal income tax on 20% of the original price.

So not worth doing, unless you either want to

(a) pay personal income tax on the value of the laptop OR
(b) commit tax fraud and not declare it on the P11D and risk penalties and back taxes

I see. But I find it equally conspicuous even if you bought a laptop brand new on the business.

Why would a tax inspector find it more believable that I'd not use it for personal use in this case?

P

[dude69]

I see. But I find it equally conspicuous even if you bought a laptop brand new on the business.

Why would a tax inspector find it more believable that I'd not use it for personal use in this case?

P

Because you would say I already had one before, but that is mine, and I have bought a new one for company use. That way you have one for personal use and one for company use and you can quite reasonably argue that you are gaining no personal benefit from the company asset - you use the personal laptop for personal use, looking at websites, and the company one for business use.

I could quite easily buy a laptop for business use, e.g., on client site, where my personal laptop (owned by me) might not be appropriate because of dubious content, mp3s, etc. on it.

If you sell your OWN personal asset to the company it is not in the least bit plausible to claim that you are not getting any personal benefit from it.

And it of course worse to sell your own asset and then pay BIK tax on it than to do the same on a new one, because the deemed BIK would be based on new value, and the tax saving would be tiny based on lower second-hand value, and input VAT would not be reclaimable.

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Any asset you use for personal AND business use needs to be apportioned according to business/personal use upon which you can legitimately claim tax relief on the business element.

[dude69]

Any asset you use for personal AND business use needs to be apportioned according to business/personal use upon which you can legitimately claim tax relief on the business element.

It seems it is actually ok.

For IT consultants, computer equipment can be seen to provide both a personal and a business use.

HMRC say, that if there is no 'significant personal use', then there is no BIK.

http://www.hmrc.gov.uk/manuals/eimanual/eim21613.htm

'For example, where a computer is provided by an employer because it is necessary for an employee to be able to carry out the duties of the employment either at home, or whilst travelling or at work, it is highly unlikely that any private use made of that equipment will be significant when compared with the business need for providing the computer in the first place. In these circumstances section 316 will apply and no tax charge will arise.'

In other words even though you might use your business PC 12 hours a day for personal use, the somewhat unquantifiable business benefit of you having a PC to do business work on, it is far higher than the actual monetary cost of providing the asset to you, and accordingly relative to the VALUE of the business use, the personal use is insignificant.

So you just need to show that the business needs the equipment, not that you don't use it for personal use......

Apologies for my confusion.

[Peter Loew]

Thanks for the replies.

Interesting indeed.

P

[lnoton]

Thanks for the replies.

Interesting indeed.

P

What did you do in the end? Im thinking the same, i have a MBP 2.33 C2D 2GB that i would like to sell to my company.

Who is your accountant?