Free Agent, FRS and £2k+ purchases

[Lance]

I know consumables are not counted to the £2k, but the grey are are accessories, I know a printer is ok, but what about a second power cable, handily for Apple they are just enough to take me over the £2k total for the laptop I want?

As for multiple invoices, I will be buying in store to avoid that

Why not buy from a small local supplier who can bundle the whole lot into one capital purchase?

I used to sell Servers like that with all the setup cost (usually considerably more than the cost of a cheap server) bundled in, so the customer could capitalise the asset.
It worked for Enron........ oh. hang on....

[craigy1874]

To be honest a VAT inspector will walk all over you without the help of the accountant that you don't have

[TheCyclingProgrammer]

I suppose you could make the argument that the accessories are part of an overall package and form part of the same overall capital purchase. Ultimately it comes down to what you think you can convince a VAT inspector if you ever have an inspection, not what any of us think. I guess there’s just about enough ambiguity there and you’d be relying on HMRC’s own computer package example to back up your argument.

[SimonMac]

I’m pretty sure it had to be a single purchase of capital goods. Emphasis on goods (plural) AND (capital). Accessories and consumables are not capital goods.

So IMO and I think this is the same overall conclusion from the thread NlUK linked to, you can purchase multiple capital goods in a single purchase but only the capital items count.

Also bear in mind Apple may send multiple invoices for one order if they ship separately. According to my accountant this isn’t a problem as long as you can clearly prove it’s a single purchase - the guidance only ever refers to a single purchase not a single invoice. You should be able to do this by keeping your order confirmation which acts as a purchase order. The order reference will be on the invoices and link them to a single purchase.

I’m kind of glad I don’t have to worry about this rubbish on the standard scheme anymore!

Don’t forget any capital goods bought outside the FRS in this way also need to be accounted for outside the FRS when sold.

I know consumables are not counted to the £2k, but the grey are are accessories, I know a printer is ok, but what about a second power cable, handily for Apple they are just enough to take me over the £2k total for the laptop I want?

As for multiple invoices, I will be buying in store to avoid that

[TheCyclingProgrammer]

I’m pretty sure it had to be a single purchase of capital goods. Emphasis on goods (plural) AND (capital). Accessories and consumables are not capital goods.

So IMO and I think this is the same overall conclusion from the thread NlUK linked to, you can purchase multiple capital goods in a single purchase but only the capital items count.

Also bear in mind Apple may send multiple invoices for one order if they ship separately. According to my accountant this isn’t a problem as long as you can clearly prove it’s a single purchase - the guidance only ever refers to a single purchase not a single invoice. You should be able to do this by keeping your order confirmation which acts as a purchase order. The order reference will be on the invoices and link them to a single purchase.

I’m kind of glad I don’t have to worry about this rubbish on the standard scheme anymore!

Don’t forget any capital goods bought outside the FRS in this way also need to be accounted for outside the FRS when sold.

[SimonMac]

oh wow.
Just the accountancy fees make it worthwhile for me, and I have other expenses as work away a lot.
Don't get me wrong, I was better off on FRS 14.5%.

I don't have any accountancy fees (unless Admin starts to charge for access here )

[Lance]

Because it makes almost zero difference (to me), easier to just sent hector the 16.5% and not have to worry about receipts day to day

oh wow.
Just the accountancy fees make it worthwhile for me, and I have other expenses as work away a lot.
Don't get me wrong, I was better off on FRS 14.5%.

[SimonMac]

They can count, as long as they're all part of the same purchase



You'll need to explain it as "Purchase of capital asset" (not "Payment" --> "Computer hardware"). Assuming other bits and bobs are as I'd expect and the total cost is >£2k, FreeAgent should automatically pull it through.

Perfect thanks a lot.

EDIT: I assume "Other Capital Asset Purchase" is the same thing?

[SimonMac]

Why are you still on FRS?

Because it makes almost zero difference (to me), easier to just sent hector the 16.5% and not have to worry about receipts day to day

[DaveB]

Provided it all goes through on one purchase it's fine. You can't aggregate separate purchases, even from the same vendor, to make it up to £2k so make sure you order everything you want cos you cant add other purchases later if you forget something.

No idea how it would work in FreeAgent, that's what I pay my accountant for

[Lance]

Why are you still on FRS?

[Maslins]

I know I need a single invoice over £2k, and with apple that is easy enough to do, does extra power blocks, cables and HDMI adapters etc count as consumables or can they count towards the £2k capital.

They can count, as long as they're all part of the same purchase

Secondly, I've read that Free agent should "automatically take care" of the VAT element when calculating my VAT return, has anyone experienced this directly?

You'll need to explain it as "Purchase of capital asset" (not "Payment" --> "Computer hardware"). Assuming other bits and bobs are as I'd expect and the total cost is >£2k, FreeAgent should automatically pull it through.

[SimonMac]

One of many but answers the question.
https://forums.contractoruk.com/acco...-vat-rule.html

Not sure I've ever given you stick for not using an accountant have I? Not searching, being a cockwomble and bearing your arse on CUK do's maybe.

EDIT : First time on the freeagent forum and they've got an 'Ask a question box at the top'. Sweet jesus.. we so need one of these. Admin? Can you make it so or is this idea not compatible with 25 year old forum software?
https://community.freeagent.com/freeagent

Didn't even know there was a freeagent forum

[northernladuk]

I know I need a single invoice over £2k, and with apple that is easy enough to do, does extra power blocks, cables and HDMI adapters etc count as consumables or can they count towards the £2k capital.

One of many but answers the question.
https://forums.contractoruk.com/acco...-vat-rule.html

Not sure I've ever given you stick for not using an accountant have I? Not searching, being a cockwomble and bearing your arse on CUK do's maybe.

EDIT : First time on the freeagent forum and they've got an 'Ask a question box at the top'. Sweet jesus.. we so need one of these. Admin? Can you make it so or is this idea not compatible with 25 year old forum software?
https://community.freeagent.com/freeagent

[SimonMac]

I know I should ask my accountant, but easier to ask the hive mind and put up with the stick from NLUK for not using an accountant.

Anyway, new company year on Thursday and deciding to splash out on a new laptop to finally replace the 7 year old MacBook. I know I need a single invoice over £2k, and with apple that is easy enough to do, does extra power blocks, cables and HDMI adapters etc count as consumables or can they count towards the £2k capital.

Secondly, I've read that Free agent should "automatically take care" of the VAT element when calculating my VAT return, has anyone experienced this directly?