Upgrade/Purchase personal laptop on business account?

[matzie]

I've just become aware of a potential problem with this issue of selling personal assets, such as a laptop, to a company.

This page: HM Revenue & Customs: Capital allowances and Corporation Tax , lists some exclusions, including:

"plant and machinery previously used for another purpose - for example a computer used at home and introduced into your company or organisation"

This suggests to me that you would need to add the value of the item back on to your profit in order to calculate corporation tax due. However, a writing down allowance of 20% might be available on it? Either way it might still be the right decision to sell such items to your company - but I can't see it being quite as clear-cut as I thought.

Perhaps one other way would be to classify the purchase as expenditure rather than an asset purchase. For small amounts (I've heard £500 presented as a reasonable amount, but there doesn't seem to be any clear rule) this would avoid the issue altogether.

Any advice?

[Clare@InTouch]

I've just become aware of a potential problem with this issue of selling personal assets, such as a laptop, to a company.

This page: HM Revenue & Customs: Capital allowances and Corporation Tax , lists some exclusions, including:

"plant and machinery previously used for another purpose - for example a computer used at home and introduced into your company or organisation"

This suggests to me that you would need to add the value of the item back on to your profit in order to calculate corporation tax due. However, a writing down allowance of 20% might be available on it? Either way it might still be the right decision to sell such items to your company - but I can't see it being quite as clear-cut as I thought.

Perhaps one other way would be to classify the purchase as expenditure rather than an asset purchase. For small amounts (I've heard £500 presented as a reasonable amount, but there doesn't seem to be any clear rule) this would avoid the issue altogether.

Any advice?

The link above does indicate that you can't claim the annual investment allowance of 100% on such items, but you're correct that you could still claim the 20%.

For items costing under c£500 I would always classify them as expenditure rather than capital - an item costing that much is unlikley to be worth anything in a years time as technology is obsolete so quickly these days.