Selling company laptop

[northernladuk]

Thanks a lot for the replies.

IMO it's a valid approach for someone in the business of technology to buy the best laptop available, keep it for 6-9 months, sell it (for the good prices one will get for 2nd hand tech that's only a generation old) and upgrade. Compared to keeping steadily-worsening technology for three years with the subtle creeping loss of productivity and compatibility that generally entails, paying for extended warranties, loss of time if it has to be sent in for repairs, etc.

Doesn't exactly sound easy to reckon this up judging from the replies so far. Yes, you can claim the VAT and CT relief; but if you then resell inside a year -- it seems quite difficult to arrive at a calculation of what the exact cost/resell cost will be.

Am not so sure about that... I don't see any of the guys at my clients with a latop that is less then 3 years old LOL.... Does a 6 - 9 month old laptop really need upgrading so soon?? HMRC will get interested if you buy two laptops a year for a couple of years IMO.

[xara]

Am not so sure about that... I don't see any of the guys at my clients with a latop that is less then 3 years old LOL.... Does a 6 - 9 month old laptop really need upgrading so soon?? HMRC will get interested if you buy two laptops a year for a couple of years IMO.

Let them get interested. It makes no business sense to keep a steadily obsolescing laptop for three years until the value completely drains out of it (whether for resell or as a up-to-date tool), with the required extension of warranty, trips to the repair shop, etc. If you write OS X / iOS stuff (a sideline of mine) support for the entire range of features generally gets bumped out of the platform every couple of refreshes (for example no Siri on iPhone). What would a Win developer do if they want to support Win 8 touchscreen stuff? If you're right that HMRC would take a position on this, it's absurd.

[Wanderer]

IMO it's a valid approach for someone in the business of technology to buy the best laptop available, keep it for 6-9 months, sell it (for the good prices one will get for 2nd hand tech that's only a generation old) and upgrade.

So you are going to spend all that time getting your new shiny thing all set up only to have to securely erase it all and rebuild it so you can flog it 6 months later and take a bit hit on depreciation? Now I like the shiny toys as much as the next boy but that's not going to be very productive.

Unless you are a journalist writing about the latest shiny thing for a magazine, it sounds more like new toy syndrome rather than there being any serious business case but hey - go right ahead if that's what you wanna do.

[northernladuk]

Let them get interested. It makes no business sense to keep a steadily obsolescing laptop for three years until the value completely drains out of it (whether for resell or as a up-to-date tool), with the required extension of warranty, trips to the repair shop, etc. If you write OS X / iOS stuff (a sideline of mine) support for the entire range of features generally gets bumped out of the platform every couple of refreshes (for example no Siri on iPhone). What would a Win developer do if they want to support Win 8 touchscreen stuff? If you're right that HMRC would take a position on this, it's absurd.

Am just being devils advocate here. There is a massive difference between 3 years and 6 months... 6 laptops worth...

In both examples I still can't see why you need to be changing laptops every 6-9 months regularly. I am not a techie so could be talking out of my arse but that frequency just seems excessive, as would HMRC I am sure. If you feel you can defend it then so be it and if that is indeed the case then you do right to demostrate selling the items and not 'making them disappear' as they have been written off tax wise. You can imagine how that would look to HMRC.

Remember this is all coming out of your pocket minus the tax. I would love to buy the latest tech every 6 months and take the loss on it selling it... but as much of it is my pocket I will get every last ounce out of my kit before buying any more.

[xara]

So you are going to spend all that time getting your new shiny thing all set up only to have to securely erase it all and rebuild it so you can flog it 6 months later and take a bit hit on depreciation? Now I like the shiny toys as much as the next boy but that's not going to be very productive.

Unless you are a journalist writing about the latest shiny thing for a magazine, it sounds more like new toy syndrome rather than there being any serious business case but hey - go right ahead if that's what you wanna do.

One generally invaluable feature of having the latest tech these days is an SSD. No secure erase possible on SSDs. You encrypt the whole thing from the get-go and remove the encryption key when you come to sell. As for rebuild, with USB3 that is a pretty quick process. It is generally a sound practice to be able to rebuild your stuff in double quick time and enforce a separation between OS and data. All my dev I do with VMs. VMs eat RAM and CPU cores for breakfast. Even the latest and greatest kit struggles.

Hey, I certainly like new toys, but I would argue strongly that there's a business case here. Buy the best you can afford, that supports all possible features offered by the latest OS; sell as soon as the next generation is available for the best resell price you're going to get; don't bother buying additional warranties and lower the probability that you will need to service the kit. Financially I think this compares favourably to buying the best you can, buying extra warranty, selling it for a pittance three years down the line (having had to suffer from way-out-of-date kit for 1-2 years), and going through the whole rigmarole again.

[jamesbrown]

Yeah, but laptop technology doesn't move much in six months (in fact, you're often best off not buying the very latest generation as soon as it arrives). If your work was that sensitive to technology, you'd probably be using high performance computing, not a laptop. Anyway, I don't think HMRC would really care. If you changed them like underwear, that might point to some other non-economic (i.e. non-business) reasons, which might lead to other questions....

[Contreras]

I don't think FRS makes any difference. It's a sale like any other, and so you charge 20% VAT to whoever you sell it to, and pay the 13.5% (or whatever it is) of the gross to HMRC.

Unless VAT was reclaimed on the original purchase:

Selling a capital asset

If you meet all the conditions and claim back the VAT on a capital asset, then when you have finished with the asset and sell it, you must charge VAT at the full standard rate - not at your flat rate percentage.

HM Revenue & Customs: Flat Rate Scheme for VAT

[ItRYmyBEst]

How does it work if you just want to give it to a family member/wife, friend you contract out, or just a friend as a gift?

[cojak]

Once the depreciation drops to zero you can do what you like with it. Give it to charity, your wife, whatever.