Laptop - Capital asset and AIA

[Orax]

I’m reading that the purchase of one laptop should be consired as a capital asset, which falls in Quickfile under the category “Office Equipment [Asset]”.

I have yet to complete my VAT return, will the laptop be automatically counted in the Annual Investment Allowance when doing my return in Quickfile, or do I need to do something in particular? I haven’t been able to find any resources on the knowledge base.

Thanks!

[QFSteve]

Hello @Orax

I found this in the forum which may help

Categorising purchases, including laptop batteries

Is a laptop battery an asset (under office equipment) or a consumable (because in 2 or 3 years it will be dead)? I assume headphone are “office equipment”. (And they are - they are noise cancelling headphones bought specifically to deal with a noisy office I am contracting in).

Also QuickFile doesn’t do any reporting on AIA, so it would be something to raise with your accountant at year end.

[ian_roberts]

AIA and other capital allowances are not relevant for VAT, they’re an income tax/corporation tax thing. For VAT you claim back all the VAT on the return that corresponds to the date of the purchase invoice or payment (depending if you’re on accrual or cash accounting), and it’s only the ex-VAT net value that goes onto the asset code.

You would then depreciate that asset over its useful lifetime in the normal way for the purposes of your QuickFile accounts, and separately from that you would claim the capital allowance on your SA/Corp tax return.

[Orax]

Thanks @QFSteve! That’s an interesting read.

Re categorisation of laptop. That would fall under the Quickfile category “Office Equipment [Asset]” from my understanding, as the item has a couple of years of life and its purchase value is higher than my capital expenditure threshold.

Re pre-incorporation expenses (from a link within the link you shared). That’s helpful for this other post I had made: Quickfile category of company formation cost and supports that the cost of incorporating a business can be reimbursed. Thanks for this link.

[Orax]

Thank you @ian_roberts, that’s very helpful.

[cbstephensaca]

Just be careful that you don’t claim the actual formation cost as this is not an allowable expense for the company.

[Orax]

Thank you @cbstephensaca, really appreciate the advice.

I had BIM 42105 in mind as a support for claiming back this expense and getting reimbursed by my business. I am reading there the ‘wholly and exclusively’ test that needs to be passed for such expenses to be claimed back.

Did I read this BIM wrong or did I misunderstood your comment?

[Orax]

Thank you @cbstephensaca, really appreciate the advice.

I had BIM 42105 in mind as a support for claiming back this expense and getting reimbursed by my business. I am reading there the ‘wholly and exclusively’ test that needs to be passed for such expenses to be claimed back.

Did I read this BIM wrong or did I misunderstood your comment?

[cbstephensaca]

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim46435

Fees incurred in forming a company are generally viewed as capital in nature and therefore not deductible against company profits.

[Orax]

Thank you for explaining and the link