How to claim cost of laptop on HMRC online corporation tax return/accounts submission

[Michael at BI Accountancy]

And add back the depreciation when calculating taxable profits!

Yes this also!

The 'asset or expense' query is one that needs to be looked at in comparison to the size of the business. Firstly you need to decide whether or not it is material, also the lifetime expectancy of the item and if applicable you need to be consistent in your approach (i.e. if you have purchased something similar in the post and capitalised it then the same approach should be followed).

[northernladuk]

£1k is the cutoff for me as far as assets goes. So things like phones and tablets go to the profit and loss as expenses but laptops would always be assets for me.

What about the sons car then. The company bought it for 12k so should I buy it off the company for say £10 and then sell it back to the company for £999 so it's not an asset?

[TheCyclingProgrammer]

£1k is the cutoff for me as far as assets goes. So things like phones and tablets go to the profit and loss as expenses but laptops would always be assets for me.

[SueEllen]

And that's what I thought. Not the advise bit of course, but oddly enough both accountants moved sub £500 purchases to assets in the two cases I can remember.

Same as mine.

[TheCyclingProgrammer]

I agree, add in as an asset and then claim AIA.

Don't forget to also put depreciation in the accounts for the asset.

And add back the depreciation when calculating taxable profits!

[northernladuk]

I get where you're coming from on the asset front but I took my accountant's advise that low value purchases just aren't worth it. The depreciation isn't CT allowable. I stick things on the asset register when they hit about £2k but that's a limit which works for me, and keeps the depreciation admin down, whereas a lower limit might be better for others.

And that's what I thought. Not the advise bit of course, but oddly enough both accountants moved sub £500 purchases to assets in the two cases I can remember.

[stek]

Remember the machine that goes bing on The Meaning of Life?

[ladymuck]

I get where you're coming from on the asset front but I took my accountant's advise that low value purchases just aren't worth it. The depreciation isn't CT allowable. I stick things on the asset register when they hit about £2k but that's a limit which works for me, and keeps the depreciation admin down, whereas a lower limit might be better for others.

[Michael at BI Accountancy]

IMO you should be treating this as an asset. It's not a cost of sale. You would need to claim capital allowances.

I agree, add in as an asset and then claim AIA.

Don't forget to also put depreciation in the accounts for the asset.

[TheCyclingProgrammer]

IMO you should be treating this as an asset. It's not a cost of sale. You would need to claim capital allowances.

A goodf accountant will show you how to do this.

[northernladyuk]

Get an accountant.

And then ask your accountant.

[northernladuk]

Get an accountant.

[ladymuck]

It should be in an overheads type account like office costs, or consumables.

If it had been an expensive laptop, I would have put it in an asset account and set up three year depreciation but that's overkill for the amount you spent.

My journal would have been:
CR bank
DR office costs

Simples.

[WTFH]

It's not a "cost of sale" but a purchase.

[aramando]

Hi, I have looked for an existing answer to a question like this, but apologies if this has been addresed before.

I am (perhaps foolishly) doing my own accounts again for the 2nd year running. I managed fine last time, but this year the business laptop I purchased from my ltd company's funds is messing things up and I can't get the balance sheet to tally with the profit & loss account.

I have added the full £1649 cost of the laptop to the "cost of sales" section in P&L to claim it as a tax-relieved business expense, and added it as a fixed asset on the balance sheet. Unfortunately the latter change causes the total net assets to exceed the P&L running total by the value of the laptop. Any idea what I'm doing wrong?