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Laptop - Asset or Expense?

I imagine that this type of question has been asked before, but, I am a sole trader, and I have just purchased a new laptop purely for business use. It cost £630.00. I have previously been advised by an accountant that it is fine to log relatively low-value equipment purchases under expenses as ‘repairs and renewals’ (unless there is a specific expense category for the purchase), but in this instance, should I record this purchase as an asset? Any advice gratefully received.

I would personally put something you expect to get a number of years use out of as an asset but if your accountant says otherwise then I’d defer to them (e.g. I’d originally logged a replacement compressor unit for my shop fridge - £600 in a fridge worth about £3k - as plant and machinery, but my accountant told me to change it to repairs). It’s not critical to get it right immediately as you can always change the nominal code of a purchase later using “move to new code”, even if the purchase has been locked by a VAT return.

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Thanks for the reply. I will check with my accountant friend (I do my own business accounts) when next we speak, but from what I’ve read elsewhere, it seems correct to record the laptop as an Asset.

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I guess it hinges on the definition of

which is inherently subjective and will depend on the nature of your particular business.

To me, it is purchases of business equipment up to a couple of hundred pounds. I guess different accountants would have different interpretations of that. I run a market stall, and have very little in the way of fixtures and fittings, or plant or office equipment.

Look up Annual investment allowance. Usually it would be a capital asset but you can write it off as an expense if you wish. But as already said, follow the advice of your accountant. But you can also ask him about whether AIA is beneficial to you or not.

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AIA is a tax allowance to be used against capital assets. It only appears in your tax return not your accounts.

A laptop is definitely a business asset - the factor to consider is whether you expect it to last longer than a year or so, and whether it is likely to retain some value over its lifetime.

£630 is not low-value - I would capitalise anything over a couple of hundred pounds or so, depending on life expectancy.

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Thank you for the advice. I will be speaking with my own accounts advisor tomorrow, but it seems clear from the information that you and others have provided that a laptop should be recorded as a business asset.

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