Reply to: how much can I spend on a desktop computer for testing and home lab ?

[john@UKCA]

Sharing company benefits with your spouse/partner

Ever thought of the company giving your wife/partner old IT or office equipment to get assets out of the company and avoiding the tax and NIC that would have been charged on you had the company giving you the equipment direct?

The BiK rules would means that assets given to the Director are taxed and Nicable based on the market value of the assets at the date given. If you pay tax at the 45% rate it could be rather costly for you and the company.

If your wife/partner pays does not pay tax (she may be a shareholder in your company receiving dividends only) it would make sense to put her on the payroll for a modest wage before the company transferred the assets to her. This way the transfer would have been treated as her earnings. And if her wage was set at the right level, tax and NI can be avoided entirely, or at least substantially reduced. You will have to delegate some of the minor duties to her such as keeping diary, making appointments, secretarial services etc to justify her pay level.

[GillsMan]

Yup, I spent £2.5K on my computer. I'm not worried in the slightest. It's perfectly legitimate for my business. Plus, I saved around £400 on the purchase as it was over £2K and I'm on the FRS VAT scheme.

[Clare@InTouch]

How much is the AIA? Reason I ask is my accountant is seemingly whinghing about the amount of proper server kit my Ltd buys, saying more or less the HMRC takes a dim view of buying too many servers - like they've got a clue and know a RISC from a CISC or POWERPC from MIPS. I buy them for a reason, there is no duality of purpose at all believe me, a stonked out PC I can understand their view, but a headless, graphic less, keyboard less and mouse less power sucker in my shed has no pleasure for stek personally I'm sure you can agree.

I think I did 3/4k last year on servers - i.e. not Apple or PC or laptops, almost all are going into colo, is that another Acc/HMRC battle in the offing?

So fukn annoying they seem to telling me my job, both the Accountant and HMRC...

HMRC do have some clever bods who know what they're talking about in different sectors, but the over riding qualifying factor is the same - if it's wholly and exclusively for business purposes then it's fine.

If your accountant is worried just tell them to put it in their Letter of Representation when they prepare your accounts, although they should be happy with a simple "Is this wholly and exclusively for the business?" "Yes" "OK" as it's clear your type of work may require expensive equipment.

It's the same as First Class vs Coach Class - one is more expensive, but both are allowable as long as they are business related as they are for the same thing. It's not for HMRC to tell you that you could have got it cheaper.

[stek]

Or this...



Apple (United Kingdom) - Mac Pro

[CloudWalker]

Just get this and make sure the company name is on the invoice ... job done

"Ultima 460i Scimitar" Intel Core i7 4770K @ 4.5GHz Overclocked Haswell Watercooled Gaming PC [FS-368-OE]

[NotAllThere]

Why would you want to spend that amount of money on a Home Lab? thats kinda too much. I built a home lab last year with total of about 800 pounds if i remember correctly. And high spec hardware -

I built the system from barebone - (google "Shuttle XPs"). My system is i5 intel processor with 32GB Ram and 2Tb Hard disk.

I also bought 2, 18" Monitor and a T stand .I run over 15 VMs at a go and system still responding alright.

In total i spent about 800 quid for all.

If I get someone else to build the machine I get:
1. A warranty
2. I don't have to spend the (fee earning) time building it.

The test is that it's for the business - no personal use. Not that it is absolutely necessary for the business (unlike claiming personal expenses).

[Brett at Nixon Williams]

AIA is £250k this year and next - Understanding annual investment allowances | UK members | ACCA UK | ACCA

Good link - This makes it quite clear how this works, specifically regarding the maximum AIA and where the accounting period spans the change in AIA. In most cases this should not be an issue.

Brett

[rurffy]

Hi there,

I don't see the point in spending low because I want it to last, plus I wish to run several virtual machines including a database so it needs to be very powerful, I need to buy everything, sound system, monitor and hardware, highest spec machine will cost nearly £3000 is that allowed, it makes no logical sense in spending cheap because it simply wont be able to cope with the latest software?

Why would you want to spend that amount of money on a Home Lab? thats kinda too much. I built a home lab last year with total of about 800 pounds if i remember correctly. And high spec hardware -

I built the system from barebone - (google "Shuttle XPs"). My system is i5 intel processor with 32GB Ram and 2Tb Hard disk.

I also bought 2, 18" Monitor and a T stand .I run over 15 VMs at a go and system still responding alright.

In total i spent about 800 quid for all.

[stek]

AIA is £250k this year and next - Understanding annual investment allowances | UK members | ACCA UK | ACCA

Fuk me and I spent like 4k max and accountant is giving me shiit!

[TheFaQQer]

How much is the AIA? Reason I ask is my accountant is seemingly whinghing about the amount of proper server kit my Ltd buys, saying more or less the HMRC takes a dim view of buying too many servers - like they've got a clue and know a RISC from a CISC or POWERPC from MIPS. I buy them for a reason, there is no duality of purpose at all believe me, a stonked out PC I can understand their view, but a headless, graphic less, keyboard less and mouse less power sucker in my shed has no pleasure for stek personally I'm sure you can agree.

I think I did 3/4k last year on servers - i.e. not Apple or PC or laptops, almost all are going into colo, is that another Acc/HMRC battle in the offing?

So fukn annoying they seem to telling me my job, both the Accountant and HMRC...

AIA is £250k this year and next - Understanding annual investment allowances | UK members | ACCA UK | ACCA

[stek]

There is no limit as to how much you can spend as such, so long as you can justify it as wholly and exclusively for the business then you should be ok.

As for the accounting treatment, if it will last more than and year and given it's cost it will likely be capitalised. Assuming you have not already used up your Annual Investment Allowance (AIA) you should still get 100% write off in the first year against taxable profits.

Brett

How much is the AIA? Reason I ask is my accountant is seemingly whinghing about the amount of proper server kit my Ltd buys, saying more or less the HMRC takes a dim view of buying too many servers - like they've got a clue and know a RISC from a CISC or POWERPC from MIPS. I buy them for a reason, there is no duality of purpose at all believe me, a stonked out PC I can understand their view, but a headless, graphic less, keyboard less and mouse less power sucker in my shed has no pleasure for stek personally I'm sure you can agree.

I think I did 3/4k last year on servers - i.e. not Apple or PC or laptops, almost all are going into colo, is that another Acc/HMRC battle in the offing?

So fukn annoying they seem to telling me my job, both the Accountant and HMRC...

[Brett at Nixon Williams]

There is no limit as to how much you can spend as such, so long as you can justify it as wholly and exclusively for the business then you should be ok.

As for the accounting treatment, if it will last more than and year and given it's cost it will likely be capitalised. Assuming you have not already used up your Annual Investment Allowance (AIA) you should still get 100% write off in the first year against taxable profits.

Brett

[malvolio]

Your accountant can advise, but If you can justify it to HMRC then all you need is Director sign off from your Ltd Co!

Your accountant will advise about Capitalised expenditure.

Assuming it is for business use and not the latest iteration of WoW...

But "How much can I...?" is a bit of a dumb question. You spend what you need to spend for the job in hand: I use an Ultrabook rather than a cheapo tablet because while most of the time it's only reading emails, on occasion I need a desktop-spec portable PC.

[stek]

Hi there,

I don't see the point in spending low because I want it to last, plus I wish to run several virtual machines including a database so it needs to be very powerful, I need to buy everything, sound system, monitor and hardware, highest spec machine will cost nearly £3000 is that allowed, it makes no logical sense in spending cheap because it simply wont be able to cope with the latest software?

Sound system for a database? Hmm, interesting! 2gb dual HD gfx too?

You'd be better off with a server such as a Sun X-series or HP DL, will run all that even on a seccy hand one and use an ordinary PC to manage it.

[MPwannadecentincome]

Your accountant can advise, but If you can justify it to HMRC then all you need is Director sign off from your Ltd Co!

Your accountant will advise about Capitalised expenditure.