Reply to: Broken laptop

[PAH]

I'm sure it's fine to write it off as knackered. It's the truth after all.

There must be quite a lot of leniency in this as my accountant once put on my accounts that I'd 'skipped' a load of gear I'd bought for a plan B that turned out to be a waste of time and money. My ltd never got a penny from this 'skipping', and my accountant is pretty straight so not likely to recommend this if it's not going to get past an inspection.

Come to think of it I never put through an invoice for the 'skip'. Damn, missed a trick there.

[Old Greg]

Thanks Clare.

And the lesson is... post in Accountancy / Legal.

[badger7579]

Thanks Clare.

[Clare@InTouch]

Your accountant can have any view they like but it's still a fixed asset if it's expected use is over 1 year

I should know I spent nine long years as an accountant bored for every minute of my working day, and I've yet seen a laptop cheap enough not to count it as an asset

It depends how risk averse you are and how much hassle you want in the case of an IR inspection....

I can't see how HMRC would care. AIA allows the asset to be written off in full in the first year, and including it as an expense has the same result. There's no tax saved or lost either way.

Materiality also needs to be considered. If you're going to capitalise anything you use for over a year then on your logic we should also be adding a calculator to the balance sheet. Where do you draw the line?

In my view a laptop costing £500 will be worth next to nothing after a year due to the speed of technological advances, therefore it would be misleading to capitalise it.

Badger - what you've suggested is fine.

[badger7579]

I'm just enquiring as to the validity of the process I have described. That’s all.

[Sands of Time]

Sorry, I'm confused...

Do I have to inform people on this forum if I want to dispose and get a new laptop?

Is the OP bragging that he can afford to buy a laptop?


I ain't 'appy!


Bing!

[badger7579]

So the laptop is a company asset
I've had it 3 years
It’s now knackered so a note is made in the accounts to effect of it being disposed of
I can purchase a new one to replace it???

[amcdonald]

It can be an expense. It depends on the cost of the laptop and your accountants view.

Your accountant can have any view they like but it's still a fixed asset if it's expected use is over 1 year

I should know I spent nine long years as an accountant bored for every minute of my working day, and I've yet seen a laptop cheap enough not to count it as an asset

It depends how risk averse you are and how much hassle you want in the case of an IR inspection....

[SueEllen]

This is the link I was going to post - http://forums.contractoruk.com/accou...ml#post1259435

[badger7579]

Yes the asset has been depreciated in the accounts.

I understand it’s not an expense and would be identified in the accounts as a company asset but the for the purpose of purchase I would buy it and claim the total back under an expense claim.

[SueEllen]

It can't be an expense, it needs to be added to your accounts as a fixed asset and amortised over the expected life of the asset

It can be an expense. It depends on the cost of the laptop and your accountants view.

[amcdonald]

My 3 year old HP laptop has finally given up the ghost and died completely. It is a company asset.

I understand that I can write this asset off and make a note that it’s been disposed of. I then plan to purchase a new one to replace it. I'll purchase the laptop and claim the total back as an expense.

Anyone see any issues with this?

It can't be an expense, it needs to be added to your accounts as a fixed asset and amortised over the expected life of the asset

Only if you were to retain a laptop for less than a year before selling it on could you justify claiming it as an expense

[Old Greg]

My 3 year old HP laptop has finally given up the ghost and died completely. It is a company asset.

I understand that I can write this asset off and make a note that it’s been disposed of. I then plan to purchase a new one to replace it. I'll purchase the laptop and claim the total back as an expense.

Anyone see any issues with this?

Have you already been including depreciation of this asset in previous year's accounts? That may affect it, I guess.

[badger7579]

Times all relative.....

[Old Greg]

Was it telling the right time before it died?

No, it was 3 years ahead. Turns out he dropped it on the way home from PC World.