Reply to: Selling/replacing company-owned smartphone

[northernladuk]

Can you donate a company asset if it hasn't fully depreciated ?

Only if you trust your butler won't tell anyone.

[Spoiler]

Nope, I almost always donate mine to either my butler, chauffeur or groundskeeper.

Can you donate a company asset if it hasn't fully depreciated ?

[Spoiler]

If you want I do anything like part exchange it would be simplest to sell it to yourself for a reasonable market value and account for VAT on that sale. Once it’s yours you can do what you like with it including selling it on without having to worry about VAT.

Seems a straight-forward solution that, thanks !

[b0redom]

Just researching options on this one - before I "ask my accountant":

Maybe looking to dispose of a company asset before it's fully depreciated - a phone !

Assuming I could sell it, but would then need to include VAT in the sale.

Assuming it could be part-exchanged as part of the transaction of buying a new phone.

Anyone done something similar ?

Nope, I almost always donate mine to either my butler, chauffeur or groundskeeper.

[TheCyclingProgrammer]

If you want I do anything like part exchange it would be simplest to sell it to yourself for a reasonable market value and account for VAT on that sale. Once it’s yours you can do what you like with it including selling it on without having to worry about VAT.

[Spoiler]

Your accountant.

You've got to speak them re your other problem. Drop this one on them as well.

HTH

Nope

[northernladuk]

Anyone done something similar ?

Your accountant.

You've got to speak them re your other problem. Drop this one on them as well.

HTH

[Spoiler]

Just researching options on this one - before I "ask my accountant":

Maybe looking to dispose of a company asset before it's fully depreciated - a phone !

Assuming I could sell it, but would then need to include VAT in the sale.

Assuming it could be part-exchanged as part of the transaction of buying a new phone.

Anyone done something similar ?

[SueEllen]

Did you read the page I linked to on balancing charges?

If the item wasn't treated as an asset, then its a simple sale and YourCo accounts for VAT and CT on the sale.

If it was an asset, YourCo accounts for VAT and has to account for any balancing charge on the profit (effectively the difference between what you claimed in capital allowances and what you've sold it for, or the market value if sold for less).

If you want to do this properly, why don't you speak to your accountant?

If you aren't bothered, why don't you take some time to think about it and make sure you don't accidentally lose the device in the meantime.

I think you mean drop it down the toilet so it's useless.

[CloudWalker]

Buy phone outright through business. (Unlocked)
Pay business calls through business. (Or all calls if contract in company name)
Replace phone when new model comes out. (Every 2 years average)
Write off old phone (eBay, spares) 👍

[TheCyclingProgrammer]

I would have to check if it was classed as a depreciating asset - like a PC - or as a disposable "misc computers" cost.

IF it is a depreciating asset, would the full sale value go to the company or only the depreciated amount?
OR, is the idea that the company would sell it to me for a fair depreciated value, and I then can choose to sell it on the open market and if this makes me a profit that's fine?

Ultimately, my company doesn't have an eBay account so I'd have to do the selling on MyCo's behalf in either case - I assume this is above board?

Did you read the page I linked to on balancing charges?

If the item wasn't treated as an asset, then its a simple sale and YourCo accounts for VAT and CT on the sale.

If it was an asset, YourCo accounts for VAT and has to account for any balancing charge on the profit (effectively the difference between what you claimed in capital allowances and what you've sold it for, or the market value if sold for less).

If you want to do this properly, why don't you speak to your accountant?

If you aren't bothered, why don't you take some time to think about it and make sure you don't accidentally lose the device in the meantime.

[VectraMan]

I would have to check if it was classed as a depreciating asset - like a PC - or as a disposable "misc computers" cost.

Either way it's still the company's property. Even disposable items still belong to the company, otherwise you could easily avoid tax by bulk buying ink cartridges though the company and selling them personally on Ebay. Obviously that's not legit. Same as what you're doing really.

Can't see that it matters how you sell it.

[northernladuk]

I would have to check if it was classed as a depreciating asset - like a PC - or as a disposable "misc computers" cost.

IF it is a depreciating asset, would the full sale value go to the company or only the depreciated amount?
OR, is the idea that the company would sell it to me for a fair depreciated value, and I then can choose to sell it on the open market and if this makes me a profit that's fine?

Ultimately, my company doesn't have an eBay account so I'd have to do the selling on MyCo's behalf in either case - I assume this is above board?

I'm guessing you are going to have to ask your accountant so why not ask them the rest when you speak to them?

[d000hg]

What's your company's policy on depreciating assets? Most accountants say 3 or 4 years don't they? So "a few" might not be enough.

It's still technically YourCo's property even if written off for the balance sheet, so strictly speaking if you sell it you should give the money to the company. And also you should charge VAT on the sale and give that to HMRC.

I would say that using it for some other purpose or giving it to your wife is one thing; selling it and pocketing the money yourself is a little more dubious.

I would have to check if it was classed as a depreciating asset - like a PC - or as a disposable "misc computers" cost.

IF it is a depreciating asset, would the full sale value go to the company or only the depreciated amount?
OR, is the idea that the company would sell it to me for a fair depreciated value, and I then can choose to sell it on the open market and if this makes me a profit that's fine?

Ultimately, my company doesn't have an eBay account so I'd have to do the selling on MyCo's behalf in either case - I assume this is above board?

[TheCyclingProgrammer]

If Doogie sells company property and pockets the money it will have been stolen. By himself. He should then hand himself in at the police station, both reporting the phone as stolen and confessing to the crime at the same time. HMRC won't like the VAT fraud much either.

However YourCo could give the phone away so there would be no VAT as no sale value. It would still need to calculate a balancing charge on the market value of the device though for capital allowances purposes.

However there are BIK implications of giving away a company asset to a director or employee:
https://www.gov.uk/expenses-and-bene...-out-the-value

So the only legitimate approaches I can see if you want to do this strictly by the book are:

* Company gives asset away to director, who pays a BIK charge on the value of the asset and the company makes a balancing charge on the market value for capital allowance purposes. Employee is free to do what they want with it, including selling it.

* Company sells the asset, pays a balancing charge for capital allowance purposes and if VAT registered, accounts for VAT on the sale.