Start up writeoffs / equipment
Discussion
Morning,
Just finalising my first tax return, and have a quick question I want to double check before I call the accountants.
In my first year of trading I understand I can write the cost off of any equipment that I brought into the company initially. (A laptop and a firewall/remote access unit) Can these costs be written off in my first year of business, (About £1200) or does it need to be done over 3 years like the purchase of business IT equipment?
Thanks
Just finalising my first tax return, and have a quick question I want to double check before I call the accountants.
In my first year of trading I understand I can write the cost off of any equipment that I brought into the company initially. (A laptop and a firewall/remote access unit) Can these costs be written off in my first year of business, (About £1200) or does it need to be done over 3 years like the purchase of business IT equipment?
Thanks
I presume you are a sole trader and completeing the Self Employed section of your tax return?
What is your financial year end?
For tax purposes, the general rule is that fixed assets cannot be completely written off against taxable profits. Instead, Capital Allowances arev claimed for them. The rates for Capital Allowances vary depending on the nature of the assets. For 2007/08, Plant and Machinery type assets brought into the business are eligible for an initial 50% allowance (cars are excluded from this - but not vans).
There are new and very different rules in place for tax year 2008/09 and further changes are coming in for 2009/10.
What is your financial year end?
For tax purposes, the general rule is that fixed assets cannot be completely written off against taxable profits. Instead, Capital Allowances arev claimed for them. The rates for Capital Allowances vary depending on the nature of the assets. For 2007/08, Plant and Machinery type assets brought into the business are eligible for an initial 50% allowance (cars are excluded from this - but not vans).
There are new and very different rules in place for tax year 2008/09 and further changes are coming in for 2009/10.
Hi Eric,
I'm submitting from the July 2007 to 31st April 2008 (Fits in with my PAYE employment then), and then have calculated the payments on account for 08/09 and onwards. I'm setup as a sole trader.
I've purchased equipment which I understand is applicable for 50% for the first year and 25% for the next two, but I think I may have been misinformed about bringing existing equipment into the business initially. I was hoping that I could claim 100% of that in the first year as a startup cost.
I'm submitting from the July 2007 to 31st April 2008 (Fits in with my PAYE employment then), and then have calculated the payments on account for 08/09 and onwards. I'm setup as a sole trader.
I've purchased equipment which I understand is applicable for 50% for the first year and 25% for the next two, but I think I may have been misinformed about bringing existing equipment into the business initially. I was hoping that I could claim 100% of that in the first year as a startup cost.
Badgerboy said:
Hi Eric,
I'm submitting from the July 2007 to 31st April 2008 (Fits in with my PAYE employment then), and then have calculated the payments on account for 08/09 and onwards. I'm setup as a sole trader.
I've purchased equipment which I understand is applicable for 50% for the first year and 25% for the next two, but I think I may have been misinformed about bringing existing equipment into the business initially. I was hoping that I could claim 100% of that in the first year as a startup cost.
Whoah there. Sort your dates out quickly or you will be in big trouble!!!!I'm submitting from the July 2007 to 31st April 2008 (Fits in with my PAYE employment then), and then have calculated the payments on account for 08/09 and onwards. I'm setup as a sole trader.
I've purchased equipment which I understand is applicable for 50% for the first year and 25% for the next two, but I think I may have been misinformed about bringing existing equipment into the business initially. I was hoping that I could claim 100% of that in the first year as a startup cost.
The tax year ends on 5th April - not the 30th of April (or April 31st which doesn't exist as I'm sure you know
)Select either 31st MARCH or 5 April as your year end date for the accounts.
For tax year 2007/08 there are NO 100% allowances for ordinary machinery and equipment - whether in a start-up or any other circumstances.
However, the situation for 2008/09 is COPMPLETELY different.
Eric Mc said:
Badgerboy said:
Hi Eric,
I'm submitting from the July 2007 to 31st April 2008 (Fits in with my PAYE employment then), and then have calculated the payments on account for 08/09 and onwards. I'm setup as a sole trader.
I've purchased equipment which I understand is applicable for 50% for the first year and 25% for the next two, but I think I may have been misinformed about bringing existing equipment into the business initially. I was hoping that I could claim 100% of that in the first year as a startup cost.
Whoah there. Sort your dates out quickly or you will be in big trouble!!!!I'm submitting from the July 2007 to 31st April 2008 (Fits in with my PAYE employment then), and then have calculated the payments on account for 08/09 and onwards. I'm setup as a sole trader.
I've purchased equipment which I understand is applicable for 50% for the first year and 25% for the next two, but I think I may have been misinformed about bringing existing equipment into the business initially. I was hoping that I could claim 100% of that in the first year as a startup cost.
The tax year ends on 5th April - not the 30th of April (or April 31st which doesn't exist as I'm sure you know
)Select either 31st MARCH or 5 April as your year end date for the accounts.
For tax year 2007/08 there are NO 100% allowances for ordinary machinery and equipment - whether in a start-up or any other circumstances.
However, the situation for 2008/09 is COPMPLETELY different.
) Funnily enough they just called me and I asked them about the question above. You are quite correct, they have taken 50% of the costs into account for the first year, and factored that into the following two returns that will be submitted!I think I'll stick to what I know and let the professionals deal with the accounts!
Thanks Eric, sage advice as always.
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