£1000 against tax bill, real cost to me?

[croyde]

Sorry folks but my accountant is away at the mo' and I have this quick question.

My old Mac is about to go under plus it's useless for video editing (Too old) which is part of my business.

Now I have been offered a Mac at discount through a friend's business but obviously this can't be put through the books, plus this probably isn't strictly legal for him so I just want to know what the real cost is to me if I buy a £1000 computer which can be claimed as a legitimate expense.

May poor maths say £600 if I'm on 40% or £800 if I am on the lower rate, depending on what I will have earned in 2011/12.

Also £1000 claimable expenditure could easily take me down to the lower rate. I'm a sole trader.

Thanks for any help, cheers.

[Eric Mc]

Wht can't it go through your books?

If your mate buys the computer and gets a discount on it. He can then sell the computer on to you for no profit. Essentially, you get the computer from hiom at the same discount he got from the computer supplier.

If you do the tramnsaction this way everyuthiong will be completely above board and you can get your 100% Anual Investment Allowance as an offset against your business profits.

VAT could be a problem if he's registered and you aren't.

[Rambaud]

If relevant to you, the Annual Investment Allowance for individuals is due to decrease to £25,000 from 6 April 2012 (1 April 2012 for companies). There are transitional rules if the accounting period straddles this date

You will need to restrict any Capital Allowance for private use - which increases the effective net cost to you.

VAT may be a stumbling block, as Eric Mc has said.

[croyde]

Yep! she is VAT registered and I'm not. I get money off Apple stuff through my BBC connection or I could buy it for my student daughter so either way it would equal the friend's deal.

My accountant has contacted me btw but cheers for the info, ta.