capital allowances for business laptop

freelancerTax

hi all,
can someone give me a definitive answer to something here!!!

say i buy a laptop for 500 euro to use for business (as a registered sole trader) what is the situation with capital allowances

1. i can write off 12.5% for 8 years
2. i can write of 33.3% for 3 years
3. slap it in as an expense ????

as we all know laptops dont last 8 years so how would this work out in senario 1. when i need to buy a new one after 2 years?.... what happens to the other 6 years of allowances left to go??

is senario 2 acceptable to revenue??

and as for senario 3. i read that its down to the person claiming as to wether something is a capital expense or not but i want to know what revenue will think of this?? when (if) they look at your accounts will they be slapping your wrists over this?

thanks all in advance
FT

Dan Chipowski

freelancerTax wrote: »

hi all,
can someone give me a definitive answer to something here!!!

say i buy a laptop for 500 euro to use for business (as a registered sole trader) what is the situation with capital allowances

1. i can write off 12.5% for 8 years - This is the correct method
2. i can write of 33.3% for 3 years
3. slap it in as an expense ????

as we all know laptops dont last 8 years so how would this work out in senario 1. when i need to buy a new one after 2 years?.... what happens to the other 6 years of allowances left to go?? - Depends if you get any sales proceeds, if you sell it for a sum greater than its tax written down value (cost less cap allowances claimed) then it gives rise to a balancing charge (treated as income). If, and in this case its more likely, you just scrap the laptop, you can claim a balancing allowance (ie the tax written down of the item at date of scrap if nil proceeds).

is senario 2 acceptable to revenue?? - Not on your life pal

and as for senario 3. i read that its down to the person claiming as to wether something is a capital expense or not - Wrong but i want to know what revenue will think of this?? when (if) they look at your accounts will they be slapping your wrists over this? - They could do

thanks all in advance - You're welcome
FT

Just my thoughts, maybe other people will differ.

freelancerTax

ok thanks for that
what about smaller items like hard drives that only cost 100 euro - i am mean to capitalize them also over 8 years?????

seems insane to me

Dan Chipowski

freelancerTax wrote: »

ok thanks for that
what about smaller items like hard drives that only cost 100 euro - i am mean to capitalize them also over 8 years?????

seems insane to me

You can stick any small items into repairs. , Any item like this which is just an enhancement of an asset doesn't have to be capitalized

freelancerTax

ok thanks very much