Capital Allowances are to be claimed on anything that is not a revenue expense. If it has no long term value then its probably fair to say its a revenue expense and if it has a useful life extending beyond the end of the accounting year in question then it is correct to write it off beyond the accounting period. Its difficult to define though: Looking at my desk, I have a PC which is 9 months old and probably is already valueless but I will only get capital allowances on it as this is defined as capital expenditure. I also have a ruler which I guess is about 5 years old and therefore in reality should have written the cost over its useful life of 5 years but as it only cost about a quid thats never going to happen.
Common sense needs to be applied. A useful rule of thumb therefore is anything above £100 should be capitalised and anything less than this treated as an expense.
Common sense needs to be applied. A useful rule of thumb therefore is anything above £100 should be capitalised and anything less than this treated as an expense.
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