Reply to: iPod touch as an expense

[LisaContractorUmbrella]

The exception to the rule that blacjac talks about is in EIM21613. Of particular interest is example 2, the Utility engineer where the employer provides a computer to the employee who uses it for about 5 minutes of work per day. Private use of the asset is substantial, however no tax charge arises because the computer was provided with the sole purpose of enabling the employee to do their work and they couldn't work without it so any non-business becomes purely incidental.

I don't know if this applies to assets other than computers but it kind of contradicts the "wholly and exclusively for business" mantra that we all live by.

As others say, if the iPod isn't for business use then tell the accountant that you aren't going to claim for it and put the expense against the director's loan account. It's your company, you don't have to do what the accountant says - they work for you not vice versa.

If you are buying an iPod to test some software you are developing then it it IS a business expense and it doesn't matter if the kids use it to play games on - see EIM21613.

But to use your own example - in the case of the utility engineer, they are unable to fulfil the terms of their employment without the piece of equipment that has been provided for them - under what circumstances could you say that you couldn't fulfil the terms of your contract without an iPod. IMHO that would be the acid test for HMRC

[Wanderer]

Something has to be bought wholly and exclusively for the purposes of the trade to be allowable. If it was but there is private use, then the Benefit in Kind rules kick in. There are exceptions of course, things like computer equipment can have private use without a BIK, as can a mobile 'phone.

The exception to the rule that blacjac talks about is in EIM21613. Of particular interest is example 2, the Utility engineer where the employer provides a computer to the employee who uses it for about 5 minutes of work per day. Private use of the asset is substantial, however no tax charge arises because the computer was provided with the sole purpose of enabling the employee to do their work and they couldn't work without it so any non-business becomes purely incidental.

I don't know if this applies to assets other than computers but it kind of contradicts the "wholly and exclusively for business" mantra that we all live by.

As others say, if the iPod isn't for business use then tell the accountant that you aren't going to claim for it and put the expense against the director's loan account. It's your company, you don't have to do what the accountant says - they work for you not vice versa.

If you are buying an iPod to test some software you are developing then it it IS a business expense and it doesn't matter if the kids use it to play games on - see EIM21613.

[BolshieBastard]

What does that prove? Sneaking small things through like iPods would never trigger any warning flags which is precisely why so many people abuse their Ltd in the first place.

Well what it 'proves' is there isnt any 'sneaking small things' through and their (my accontant's advice) advice is robust.

Sorry to piss on your chips again but what does your question prove, exactly?

You seem to have jumped to the conclusion my accountants gave the original advice when in fact, what I said was, if my accountant had of given me the advice, I would have been happy with it rather than turn to barrackroom accountants.

Again, as I said later, too many people being too anal. Well done .

[Clare@InTouch]

Isn't the term 'wholly and exclusively'?

Something has to be bought wholly and exclusively for the purposes of the trade to be allowable. If it was but there is private use, then the Benefit in Kind rules kick in. There are exceptions of course, things like computer equipment can have private use without a BIK, as can a mobile 'phone.

[d000hg]

I've been with my accountant for nearly 15 years using 3 different ltd co's. I've never had any comeback from IR \ HMRC in this time

What does that prove? Sneaking small things through like iPods would never trigger any warning flags which is precisely why so many people abuse their Ltd in the first place.

[stek]

You are misunderstanding the use of the word wholly.
In the sense of company purchase, it is not that the 'thing' can wholly be used for business, its that it was wholly bought for business use.

One of the examples HMRC themselves give, that is often quoted here, is that of a field engineer being bought a computer to download and print off his daily jobs list. Takes him 15 minutes per day and then the computer is used by the wife and kids for browsing, shopping etc.. for much more time.
HMRC themselves say that this is OK as the computer was bought solely for the purpose of the engineer downloading and printing his job sheet. Therefore it was bought wholly for business use. Any other use is incidental, no matter how much time it takes.

Isn't the term 'wholly and exclusively'?

[blacjac]

Can anyone thing ever be wholly for one purpose? Like I say, how much is the BIK for a £210 iPod, is the kickback worth taking?

You are misunderstanding the use of the word wholly.
In the sense of company purchase, it is not that the 'thing' can wholly be used for business, its that it was wholly bought for business use.

One of the examples HMRC themselves give, that is often quoted here, is that of a field engineer being bought a computer to download and print off his daily jobs list. Takes him 15 minutes per day and then the computer is used by the wife and kids for browsing, shopping etc.. for much more time.
HMRC themselves say that this is OK as the computer was bought solely for the purpose of the engineer downloading and printing his job sheet. Therefore it was bought wholly for business use. Any other use is incidental, no matter how much time it takes.

[stek]

An iPod Touch is an iOS device, like an iPhone and an iPad. However it obviously doesn't have all the capabilities of an iPhone. If one's business activities included developing apps for iOS, then one might well buy an iPod Touch for the purpose of testing said apps on that particular iOS platform prior to release, for example to make sure that it didn't crash in the absence of some system facility only available on the iPhone. In such a case surely it would be perfectly legitimate to put it through as a business expense?

Not relevant to 5*'s current case, I know, but worth noting.

I am an Apple Dev, paid for - can I buy one???

[NickFitz]

No way is an IPod an allowable expense. If you work on the premise that something could be used for business purposes, you could justify practically anything

An iPod Touch is an iOS device, like an iPhone and an iPad. However it obviously doesn't have all the capabilities of an iPhone. If one's business activities included developing apps for iOS, then one might well buy an iPod Touch for the purpose of testing said apps on that particular iOS platform prior to release, for example to make sure that it didn't crash in the absence of some system facility only available on the iPhone. In such a case surely it would be perfectly legitimate to put it through as a business expense?

Not relevant to 5*'s current case, I know, but worth noting.

[stek]

We seem to be having a few of these threads. If you know its dodgy but out it through anyway, then, yes, chances are you wont get caught.

But, I could craft a lovely made-up hotel receipt for £100 a month and put that through too. Probably never get caught out. But thats not the point.

HMRC aren't stupid (OK maybe they are sometimes). Do you seriously think they wont know the score when you try to justify an ipod touch as a business use? yeah right.

I knew a guy years ago who bought a TV and DVD player for his house. Thought if he bought one training DVD he could justify the lot as a business expenses. This was pre-flat rate vat too so he tried to claim the VAT back as well.

VAT people came to visit eventually. Werent happy about it to say the least...

Are they really that bothered for a 75-150k t/o ltd as to whether there's a 200/500 even a 1000 quid loss of taxable, does anyone even look or analyse? I've worked at the Tax Office, and I say not, a visit is 1000/2000 quids at least, to recover the BIK on 210 quid or even 1000 quid?

[Notascooby]

but if he said that as part of contract he was required to give on-site training and was required to provide the required infrastructure to deliver it....

Then my guess he would have been fine

There's flexing the rules and totally taking the piss - such as the family holidays oft talked about. The level of risk taking is personal.

In this case its simple enough to reverse out buy subtracting £210 for the next expense or div payment or to leave in and let it ride....

[psychocandy]

We seem to be having a few of these threads. If you know its dodgy but out it through anyway, then, yes, chances are you wont get caught.

But, I could craft a lovely made-up hotel receipt for £100 a month and put that through too. Probably never get caught out. But thats not the point.

HMRC aren't stupid (OK maybe they are sometimes). Do you seriously think they wont know the score when you try to justify an ipod touch as a business use? yeah right.

I knew a guy years ago who bought a TV and DVD player for his house. Thought if he bought one training DVD he could justify the lot as a business expenses. This was pre-flat rate vat too so he tried to claim the VAT back as well.

VAT people came to visit eventually. Werent happy about it to say the least...

[stek]

What a breath of fresh air...

Bolshie saying what happens in practice rather than preaching the HMRC way.

Can you of course you can...is it within the letter and spirit of the law - is it bollock.
Is it worth the risk - that's up to you - but £210 isn't going to set anyones heart racing.

If local goverment departments can legitimately buy 100's of iPads for staff just to burn up budget then I think you could argue that you bought the Touch to study with whilst commuting to work etc.

Right I'm off to check my log book to ensure that my cycle to work bicycle has been used for at least 60% of the time for commuting before I go out for a spin at the weekend....seeesh.

It's right really, when I stay away I claim it as a business expense, but I get a double bed to myself, instead of half of one at home, therefore I received a BIK...

Can anyone thing ever be wholly for one purpose? Like I say, how much is the BIK for a £210 iPod, is the kickback worth taking?

[Notascooby]

What a breath of fresh air...

Bolshie saying what happens in practice rather than preaching the HMRC way.

Can you of course you can...is it within the letter and spirit of the law - is it bollock.
Is it worth the risk - that's up to you - but £210 isn't going to set anyones heart racing.

If local goverment departments can legitimately buy 100's of iPads for staff just to burn up budget then I think you could argue that you bought the Touch to study with whilst commuting to work etc.

Right I'm off to check my log book to ensure that my cycle to work bicycle has been used for at least 60% of the time for commuting before I go out for a spin at the weekend....seeesh.

[Old Greg]

No way is an IPod an allowable expense. If you work on the premise that something could be used for business purposes, you could justify practically anything

Which is the link to Montpellier.