Office equipment not reducing tax liability

Our Ltd company is a new startup. We bought a laptop just before starting trading which I paid for initially via the Directors Loan account and have just claimed the money back. I coded it to Office Equipment and it shows on the Balance Sheet, but it is not altering the P/L report. I believe I can claim 100% of its value in the first year but how do I show this in Quickfile?

Hi Abi,
That’s because its an asset which for accounting depreciates over time and you accounts must show the records for that, typically depreciation is 20% or 25% per year on a reducing asset balance.
Basically for accounting you use depreciation for the assets which will show on your P&L but is added back for tax purposes, because asset purchases are claimed against tax via “capital allowances” on the tax return, and those rules are completely different, typically you can claim 100% of the purchase cost for new purchases or 18% per year on a reducing balance

You should read up on Assets & Depreciation and also Capital Allowances
as its not as simple as I’ve outlined above

1 Like

Thanks, you’ve given me a head start on where to go and research :smile:

1 Like