Smartphones - how to change handset

[ritch]

While I appreciate the treatment of 'smartphones' has been done to death and is suitably covered here:

Contractors' Questions: Can I claim an iPhone as a company expense? :: Contractor UK

...MyCo has purchased a smartphone as an expense but the next model is now out, the contract is SIM only and in MyCo name.

How do I write-off/ buy the old handset in order to enable MyCo to purchase the next handset as an expense and maintain the 'one handset' per employee rule?

Thanks

[northernladuk]

When you say next model is out, how old is your current one? Changing it year on year may raise a few eyebrows as that is personal choice and not a real requirement for the business but it isn't a great problem.

If you want to be clean about it then the business can sell the old one for a reasonable price and then just expense the new one.

If you expense it then you don't really need to worry about writing it off, just don't be buying a new one every 6 months/year to make it stand out for questioning.

[ritch]

Thanks for the quick response

So if I go the clean route, how would I eventually show that income from the handset sale on my accounts.
At this stage it's not an asset so wouldn't appear as income from the sale of fixed assets, would it be an 'other operating income' line like credit interest? or would I write myself an invoice and make it part of the turnover?

[SueEllen]

Thanks for the quick response

So if I go the clean route, how would I eventually show that income from the handset sale on my accounts.
At this stage it's not an asset so wouldn't appear as income from the sale of fixed assets, would it be an 'other operating income' line like credit interest? or would I write myself an invoice and make it part of the turnover?

Quick email to your accountant will sort this out.

[northernladuk]

Thanks for the quick response

So if I go the clean route, how would I eventually show that income from the handset sale on my accounts.
At this stage it's not an asset so wouldn't appear as income from the sale of fixed assets, would it be an 'other operating income' line like credit interest? or would I write myself an invoice and make it part of the turnover?

I guess it is the last of these but I am no accountant. Not much of a contractor either to be fair but anyway... You could of have accidentally dropped the original handset so is now unsaleable and require a new handset so no fancy accounting needing to be done.... Heaven forbid I would condone such actions. Am just saying like.....

[Jessica@WhiteFieldTax]

Just say it was obsolete and you replaced it.

I very much doubt hector will even ask. If he/she does ask, they won't go beyond "it was obsolete".

You can write it off in your fixed assets register if you wish; you can sell it to yourself or AN Other but its not really necessary. I can honestly say I've never seen HMRC raise it as a query; the BIK naturally links to active handsets with sims/contracts.

Don't sweat on it.

[ritch]

thanks all