Originally posted by pr1
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Previously on "newbie question about hardware purchasing"
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Originally posted by northernladuk View PostWhere as I certainly think the 'it's 20% saving' should always be considered when you are talking costs like this then it's different as the numbers suggest.
I think it's fair to bring that up when people are asking about putting coffees, sandwiches and other crap like that through. It's just not worth the saving to be buggering about. 1k+ purchases then it is.
Right idea, wrong time to apply it is say.
Originally posted by pr1 View Postmy point was people might only "need" a £400 laptop but they'll buy a £2000 one just to 'save more tax' after seeing calcs like the above
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Originally posted by pr1 View PostIMO,
you need a laptop to do your work (presumably) - HMRC won't bother arguing over whether you need a £400 laptop or a £2000 laptop so go nuts - bare in mind you're only saving on the tax (20%) - you're still buying it with your (company's) money
(IANAA/IANAA)
I think it's fair to bring that up when people are asking about putting coffees, sandwiches and other crap like that through. It's just not worth the saving to be buggering about. 1k+ purchases then it is.
Right idea, wrong time to apply it is say.
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Originally posted by VectraMan View PostIs that really a rule?
FWIW I bought a desktop through the company not long after I first started as I was doing client work from home, and later on also bought a laptop which I mainly justified by saying "I'm an IT contractor", and although both were used on and off for genuine business work they were more often not. But my current laptop and desktop I bought personally. If something's a company asset it needs to be accounted for, and again if you sell it, whereas by owning things personally you can do whatever you want and never have to worry. In the unlikely event that an HMRC man did come round I can say "those are nothing to do with the company" and then I don't have to justify anything.
I'd have saved a bit of CT, but not VAT, so I decided it wasn't really worth it. But that's up to you.
Dunno if it's a rule but it's common sense. When you come to sell the machine you won't be taking the card out. It's not likely to be any use so it's linked to that personal machine.
I certainly wouldn't buy kit for my personal machine through the company. I would however sell the desktop to the company at market value and then do it..... If I could justify I use it with a good amount of business use if course.
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Originally posted by VectraMan View PostLaptop expense isn't £1300, it's £1667. And if you buy it personally it doesn't come out of business funds at all. I get your logic, but that's not really comparing apples with apples.
It amazes me people want to spend £2K on a laptop "to save money". Sure if it's a choice between an £1800 laptop and £2K laptop then spec it up so you can get the VAT saving, but if the business case is "I need something to do my accounts on" then you don't need to spend £2K.
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Originally posted by VectraMan View PostLaptop expense isn't £1300, it's £1667. And if you buy it personally it doesn't come out of business funds at all. I get your logic, but that's not really comparing apples with apples.
It amazes me people want to spend £2K on a laptop "to save money". Sure if it's a choice between an £1800 laptop and £2K laptop then spec it up so you can get the VAT saving, but if the business case is "I need something to do my accounts on" then you don't need to spend £2K.
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Originally posted by vwdan View PostI know, I've just noticed my mistake too - was gonna delete and redo. Point is it, if he's normal VAT registered it's still much the same and the saving isn't "just 20% CT as is often banded about"
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Originally posted by vwdan View PostI hear this all the time on here, but it's not just that. If you want to buy a £2000 incl VAT laptop you're saving £333 straight away in VAT, then another £333 in corporation tax making it a cost to your business of £1300 or so.
Alternatively, you pay CT on your current profits, draw it as a dividend, pay your 20% tax and then buy the laptop inclusive of VAT.
Bag of a fag packet calcs:
Laptop Cost: £2000 incl VAT
Buying Through Company
Company Funds: £10,000
Laptop Expense: £1300
Pre Tax Profit: £8700
Corporation Tax: £1740
Post Tax Profit: £6960
Company Funds: £6960
It amazes me people want to spend £2K on a laptop "to save money". Sure if it's a choice between an £1800 laptop and £2K laptop then spec it up so you can get the VAT saving, but if the business case is "I need something to do my accounts on" then you don't need to spend £2K.
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Originally posted by pr1 View Postvery good, except the OP said he wanted a ~£1K laptop...Last edited by vwdan; 25 August 2016, 08:21.
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Originally posted by vwdan View PostI hear this all the time on here, but it's not just that. If you want to buy a £2000 incl VAT laptop you're saving £333 straight away in VAT, then another £333 in corporation tax making it a cost to your business of £1300 or so.
Alternatively, you pay CT on your current profits, draw it as a dividend, pay your 20% tax and then buy the laptop inclusive of VAT.
Bag of a fag packet calcs:
Laptop Cost: £2000 incl VAT
Buying Through Company
Company Funds: £10,000
Laptop Expense: £1300
Pre Tax Profit: £8700
Corporation Tax: £1740
Post Tax Profit: £6960
Company Funds: £6960
Buying Personally
Company Funds: £10,000
Laptop Expense: £0
Pre Tax Profit: £10,000
Corporation Tax: £2000
Post Tax Profit: £8000
Dividend Withdrawal: £2400
Laptop Cost: £2000
Personal Tax @20%: £400
Company Funds: £5600
Unless I've gone very wrong somewhere (Plausible, it's early) that's a difference of £1300 to your bottom line
my point was people might only "need" a £400 laptop but they'll buy a £2000 one just to 'save more tax' after seeing calcs like the aboveLast edited by pr1; 25 August 2016, 08:19.
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Originally posted by pr1 View PostIMO,
bare in mind you're only saving on the tax (20%) - you're still buying it with your (company's) money
Alternatively, you pay CT on your current profits, draw it as a dividend, pay your 20% tax and then buy the laptop inclusive of VAT.
Bag of a fag packet calcs:
Laptop Cost: £2000 incl VAT
Buying Through Company
Company Funds: £10,000
Laptop Expense: £1600
Pre Tax Profit: £8400
Corporation Tax: £1680
Post Tax Profit: £6720
Company Funds: £6720
Buying Personally
Company Funds: £10,000
Laptop Expense: £0
Pre Tax Profit: £10,000
Corporation Tax: £2000
Post Tax Profit: £8000
Dividend Withdrawal: £2400
Laptop Cost: £2000
Personal Tax @20%: £400
Company Funds: £5600
Unless I've gone very wrong somewhere (Plausible, it's early) that's a difference of £1100 to your bottom lineLast edited by vwdan; 25 August 2016, 08:21.
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Originally posted by eek View PostThe first rule is that you can't really put a company asset into a non company asset - if you want the video card it really needs to go into a company machine.
FWIW I bought a desktop through the company not long after I first started as I was doing client work from home, and later on also bought a laptop which I mainly justified by saying "I'm an IT contractor", and although both were used on and off for genuine business work they were more often not. But my current laptop and desktop I bought personally. If something's a company asset it needs to be accounted for, and again if you sell it, whereas by owning things personally you can do whatever you want and never have to worry. In the unlikely event that an HMRC man did come round I can say "those are nothing to do with the company" and then I don't have to justify anything.
I'd have saved a bit of CT, but not VAT, so I decided it wasn't really worth it. But that's up to you.
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Originally posted by gixxer1k View PostHello, new i.t. contractor here, just started last month
I was wondering if anyone can advise as to if i can list a new graphics card (gtx1060 - ~260 quid from amazon) and/or a laptop (about 1k £) in my LTD expenses?
In all likelihood it's not going to be used 100% for work, but if we're going to be pendantic about it, neither did the desktop computer and laptop given to me by my last employer, there were days where my development mojo was simply not there and watching lolcats in youtube seemed more appealing than trying to decipher fix messages... Also, how is hmrc going to prove what you did with an asset in order to slam you with a fine anyway? wild guess based on the colour of mosfets on the pcb?
you need a laptop to do your work (presumably) - HMRC won't bother arguing over whether you need a £400 laptop or a £2000 laptop so go nuts - bare in mind you're only saving on the tax (20%) - you're still buying it with your (company's) money
(IANAA/IANAA)
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