what section, (is the correct name nominal code?) do i put hand powertool purchases?
drills, saws, routers etc - Building & Joinery portable powertools.
im not talking about fixed machinery or saws in a workshop.
do i put them as General Purchases 5000, or Plant & Machinery Assets 0020?
does it make a difference on the cost? do tools of less than say £500 go into general purchases?
all hand powertools no matter how much they are are all worth much less after a year, and in every day use you would expect two to 3 years ideally out of them. Most of the tools i buy come with a 2 or 3 year warranty these days.
Personally I’d say that sounds like assets but with a fairly steep reducing balance depreciation (e.g. 50% after year 1, 75% after year 2 etc.), but I’m not an accountant so best to ask yours if you want proper advice. Definitely not general purchases though, that’s for things like stock you buy for resale or materials that are consumed in particular jobs.
i can only see plan & machinery 0020 though.
ive asked my accountant for their view.
If the accountant says that your situation is such that you can write small tools off at the point of purchase (I don’t think you will have too much trouble from HMRC with this policy as long as you are sensible - i.e. your £500 rules sounds pretty reasonably unless the total comes to a lot) then you can use 8206 Non-Capital Equipment, an expense / overhead account. [I can’t recall whether I made it or whether it was already in the system. You can make an account from ‘Reports’ -> ‘Chart of accounts’ -> ‘create new account’ category overheads if you need to]. I use this for IT bits and bobs and the odd small office furniture items that are more or less valueless soon after brought into use.
You can write the whole cost off under the Annual Investment Allowance but they are still assets which depreciate. The reason you can’t find the nominal is because there isn’t one you need to create one called tools and put it under overheads
Obviously use the advice of your accountant first as I wouldn’t want to go against what they say considering they know you better than I do.
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