Reply to: Expenses Out of Contract

[Lance]

The above conversation would have had a small degree of relevance only if your company was dormant and you were to buy the PC during a year where you want to keep the company dormant. You could have then made the purchase personally and claimed the expense as a pre-trading expense when you reinstated your trading. However, whilst you have not achieved dormant status and you are in fact trading by actively looking for new business does not justify the response from your accountant.

unless of course there's not enough profit in the company to cover the expense.

[PerfectStorm]

If you're not trading then see how they feel about pausing accountancy fees until you are. You'll suddenly find you're an active and solvent business then.

[Chart Accountancy]

I wish...

Conversation was basically:

Me: My old PC is on its last legs. I'm getting a new one.
Acct: OK, I see your contract is finished. What client are you working at now?
Me: I'm currently looking for a new one.
Acct: If you're not trading then HMRC won't allow this as an expense.
Me: I am trading - I just don't have a customer right now. Anyway, I'm not buying it for a client. It's for operating my own company.
Acct: Then you can't expense it. You'll have to buy it privately now and then expense it later once you have a client.
Me: What???!!! It's for my company. It's not for a client. Why does my unknown next client have any interest in my company PC?
Acct: Just Because(*)

(*) Or some other meaninglessness

I'm thinking of getting my next door neighbour as a "client" and charge him £2 to set up his Netflix account. Then I can ask my accountant to expense my PC against it

Or, perhaps more sensibly, change accountants....

The above conversation would have had a small degree of relevance only if your company was dormant and you were to buy the PC during a year where you want to keep the company dormant. You could have then made the purchase personally and claimed the expense as a pre-trading expense when you reinstated your trading. However, whilst you have not achieved dormant status and you are in fact trading by actively looking for new business does not justify the response from your accountant.

[ladymuck]

It is complete and utter tosh.

There is some personal use allowed of company PC's (just think of all the permies who do their dildo shopping while at work) similar to how mobile phones are allowed. Would your accountant not allow you to charge your mobile costs even though you need one as much as a PC in order for your company to procure new work?

He's an idiot and I'd be tempted to report him to whatever professional body he's a member of.

[whatnow]

That would have been the interesting bit, to see his justification but...


This and be done with it.

I can't remember the exact wording but it was just reiterating the previous point: if I don't have a client then HMRC would say that the expense cannot be for my current trade of my business.

[northernladuk]

Acct: Just Because(*)

(*) Or some other meaninglessness

That would have been the interesting bit, to see his justification but...

Or, perhaps more sensibly, change accountants....

This and be done with it.

[whatnow]

One does wonder what in the world the accountant was told that made him say this.

Sometimes, of course, people described on the Internet are complete idiots. But maybe OP let it slip that he's taking six months bench time to try to become the Minecraft world champion, or something, and the accountant might have a point.

Or, maybe he's a complete idiot.

What exactly did you tell him?

I wish...

Conversation was basically:

Me: My old PC is on its last legs. I'm getting a new one.
Acct: OK, I see your contract is finished. What client are you working at now?
Me: I'm currently looking for a new one.
Acct: If you're not trading then HMRC won't allow this as an expense.
Me: I am trading - I just don't have a customer right now. Anyway, I'm not buying it for a client. It's for operating my own company.
Acct: Then you can't expense it. You'll have to buy it privately now and then expense it later once you have a client.
Me: What???!!! It's for my company. It's not for a client. Why does my unknown next client have any interest in my company PC?
Acct: Just Because(*)

(*) Or some other meaninglessness

I'm thinking of getting my next door neighbour as a "client" and charge him £2 to set up his Netflix account. Then I can ask my accountant to expense my PC against it

Or, perhaps more sensibly, change accountants....

[WordIsBond]

One does wonder what in the world the accountant was told that made him say this.

Sometimes, of course, people described on the Internet are complete idiots. But maybe OP let it slip that he's taking six months bench time to try to become the Minecraft world champion, or something, and the accountant might have a point.

Or, maybe he's a complete idiot.

What exactly did you tell him?

[CryingSheep]

OP needs to change their 'accountant.'

I suspect the accountant 'knows' the new PC is not going to be used by the business and is just using the 'wholly and exclusive' and being out of contract as a reason not to allow it as a business expense.

And how is that any of his business...?

[CryingSheep]

Wait a minute.....

do we have absolute agreement from EVERYONE?!?

seems suspicious to me!

Lets hope his accountant doesn't use this forum...

[vwdan]

Is that what you call it over there

I think he may be thinking of Fake Taxi.

Gotta earn money on the bench somehow, I guess!

[cojak]

Really? Last time I was benched I used my computer to get really really good at Worms Armageddon.

Well... that as well.

But I stand by my original comment!

[northernladuk]

No. Surprising, huh? My wife just reminded me of the time that after the kids went to bed, we'd play Crazy Taxi. My son was really annoyed when he started the Gamecube up, and found that we had the top ten high scores. *sigh* I rarely have the time anymore to play. Maybe I should retire.

Is that what you call it over there

[NotAllThere]

Did you fail at that as well?

No. Surprising, huh? My wife just reminded me of the time that after the kids went to bed, we'd play Crazy Taxi. My son was really annoyed when he started the Gamecube up, and found that we had the top ten high scores. *sigh* I rarely have the time anymore to play. Maybe I should retire.

[northernladuk]

Really? Last time I was benched I used my computer to get really really good at Worms Armageddon.

Did you fail at that as well?