fixed assets or expense fixed assets or expense
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  1. #1

    Nervous Newbie


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    Default fixed assets or expense

    I am filing my limited company account and cooperation tax for the first time, I put some tangible asset like desk, laptop in the balance sheet already, and now realised maybe it is easier to put them as expense not asset for accounting purpose, to avoid depreciation etc. which made it quite complicated to me, my questions are:
    1.Can I consider them as expense not assets? then the fixed assets value will be 0, only showing some share capital
    2.If yes, how can I change the balance sheet as it has been submitted to the company house already and available online?
    Thanks a lot

  2. #2

    Should post faster


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    Quote Originally Posted by dc1234 View Post
    I am filing my limited company account and cooperation tax for the first time, I put some tangible asset like desk, laptop in the balance sheet already, and now realised maybe it is easier to put them as expense not asset for accounting purpose, to avoid depreciation etc. which made it quite complicated to me, my questions are:
    1.Can I consider them as expense not assets? then the fixed assets value will be 0, only showing some share capital
    2.If yes, how can I change the balance sheet as it has been submitted to the company house already and available online?
    Thanks a lot
    Hi,

    Most accountants will have a "rule" that they apply when deciding whether a purchase should be classified as a balance sheet (capital cost) or profit and loss (revenue cost) item. It is up to you as a director to decide on the appropriate cost basis for capitalising assets.

    If you've claimed Annual Investment Allowance in relation to these items then the tax position will be the same (you'll have enjoyed Corporation Tax Relief at the same rate) as if you'd not included them on your balance sheet. Your depreciation rule is now also set and so calculation and reporting going forward should be easy.

    If you did want to adjust the accounts and CT600 then you'll need to file amended versions of both. Amended accounts must be filed with Companies House in paper format while the CT600 can be filed electronically.

  3. #3

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    You really sure not having an accountant is a good idea? These really aren't difficult questions.
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  4. #4

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    Quote Originally Posted by northernladuk View Post
    You really sure not having an accountant is a good idea? These really aren't difficult questions.

    What makes you think the OP doesn't have an accountant?
    See You Next Tuesday

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    Quote Originally Posted by Lance View Post
    What makes you think the OP doesn't have an accountant?
    Eh??
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    Quote Originally Posted by northernladuk View Post
    Eh??
    been a long day
    See You Next Tuesday

  7. #7

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    I think a reasonable rule is straight line depreciation on items over 1k.

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    Quote Originally Posted by jamesbrown View Post
    I think a reasonable rule is straight line depreciation on items over 1k.
    My accountant is £500 and last time we discussed (which, OP, is a lot, try the search) quite a few others said the same.
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    Quote Originally Posted by jamesbrown View Post
    I think a reasonable rule is straight line depreciation on items over 1k.
    Quote Originally Posted by northernladuk View Post
    My accountant is £500 and last time we discussed (which, OP, is a lot, try the search) quite a few others said the same.
    The level depends on your type and size of business, there is no right answer as long as you're consistent and can justify it.

    I initially capitalised a desk that cost me £160 back in the day but couldn't be bothered to reverse it. I now go up to £300 on furniture and £750 on computer equipment before it gets classed as an asset.

  10. #10

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    Quote Originally Posted by northernladuk View Post
    My accountant is £500 and last time we discussed (which, OP, is a lot, try the search) quite a few others said the same.
    Yep, £500 is pretty common, I think.

    Within reason, accuracy and consistency are more important than the precise amount (i.e., being able to explain what you did and why).

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