Reply to: Laptop for the company

[SueEllen]

In both cases, this probably means that you can argue that it is wholly and exclusively for business purposes but not necessarily necessarily, if that makes any sense. Indeed, necessarily is usually the hardest of the three to satisfy.

So I have lots of computers in my house owned by me personally, but because I have to work away from home and do demonstrations away from home buying a laptop for the business is not a necessary expense.

[THEPUMA]

Even if you have 2 or 3 other computers in your house?

I think it's fair to say this is purely for business!

In both cases, this probably means that you can argue that it is wholly and exclusively for business purposes but not necessarily necessarily, if that makes any sense. Indeed, necessarily is usually the hardest of the three to satisfy.

[TheFaQQer]

I think it's fair to say this is purely for business!

Since when has "fairness" come into it?

It might even be "reasonable" to argue it. However, it may be that HMRC is neither reasonable nor fair in the analysis of whether it's a valid expense or not.

[Alan @ BroomeAffinity]

Hope the new laptop has a spellchecker:

Replies not Replys
Company's not Companies

[London75]

Perfect timing, just done the same (albeit a Dell from Tesco, great deal on an XPS 1530 if anyone is interested) and also with Nixon Williams and worried about the guidance. No company name on invoice in my case as it wasn't an option ordering from Tesco Direct lol.

I couldn't pay direct as it's a new company and Cater Allen won't give me a debit card for 6 months and nowhere accepts cheques now.

Think I'll claim next month anyway. With more than 1 computer per person in the house already, I think it's fair to say this is purely for business!

[SueEllen]

The issue is that if you incur the expense as an employee and make an expense claim to your company, then it will be a taxable benefit-in-kind unless it is incurred wholly, exclusively and necessarily for the purposes of the trade, which is a very difficult test to pass and in the case of a laptop it probably wouldn't pass.

Even if you have 2 or 3 other computers in your house?

[dx4100]

Thanks for the replys...

I spoke to someone at Nixon Williams today and they said just claim it on my expenses sheet... Why the need for that note in there guide is still a mystry lol...

The invoice is in the companies name and its just for business use so I can see there being any of the potential issues listed above. Im also on flat rate VAT so no VAT issues either... I have to pay it :P

Thanks for the replys...

[THEPUMA]

The issue is that if you incur the expense as an employee and make an expense claim to your company, then it will be a taxable benefit-in-kind unless it is incurred wholly, exclusively and necessarily for the purposes of the trade, which is a very difficult test to pass and in the case of a laptop it probably wouldn't pass.

Whereas if the company purchases the laptop directly or the employee purchases the laptop on behalf of the company (ie in practise the invoice is in the company name), you should be OK.

PUMA

[Spacecadet]

Even if you buy something direct from your company account it's no guarantee that you won't use it for personal stuff, so I don't think it makes any odds how you do it.

From an accounting and tax point of view, it's a lot simpler if business items are paid for straight from the company account.

[VectraMan]

Also, most vendors (PC World, Dell, dabs.com) will raise the invoice to your company regardless of the payment method.

I've bought a couple of Dells and done just that: paid with my personal credit card but filled in the company name so that it appears on the invoice. It is a company purchase for all intents and purposes, I've just temporarily loaned the company the money.

Even if you buy something direct from your company account it's no guarantee that you won't use it for personal stuff, so I don't think it makes any odds how you do it.

[Alan @ BroomeAffinity]

Also, most vendors (PC World, Dell, dabs.com) will raise the invoice to your company regardless of the payment method.

[Alan @ BroomeAffinity]

If you bought it personally, you claim it back on yuor expenses. No potential problem that I can see. i have never had any issues with such a transaction.

You can see there could be an issue with the VAT reclaim but again, its never been a problem for me in practice and I've been involved in a few VAT enquiries in my time. Presumably the OP will be on FRS for VAT anyway and the laptop is unlikely to cost >£2k.

[Platypus]

Weren't there some threads a while back indicating that if you buy personally then the VAT won't be reclaimable. Personally I think this is tosh (I've never had a problem doing this) but perhaps that's what the accountant is alluding to.

"Potential Problems" isn't a very useful comment though is it !

[ratewhore]

Sounds like a load of old toss to me. You can sell whatever you want from you to the Ltd and from the Ltd to you. The only time it would be an issue would be where you are gaining personally from the transaction (i.e. selling for more than market rate to the Ltd).

Your accountant is probably right in that it is better to use the company credit/debit cards but it's not the end of the world that you didn't and you shouldn't concern yourself...

[dx4100]

One thing I found when I brought my laptop and other services is that if you buy them as a business, your warranty and the after care you receive is different.

If you buy it personally then use the item for business use then you find that you are not protected by consumer legislation as it's for business use, and you don't have the additional business protection.

Cheers for your reply...

Alot of that comes down to how honest I am with the warranty people regarding the use of the laptop lol. Good points though.....