Limited Trade Test Relevant Goods

[Lance]

Oh.. does it mean if the cost is over 2% but I am a service company that would attract look into why I am not a limited company? Just planing to get some quality stationary, which might cost 3% of revenue.. thanks.. I guess good stationary is still stationary not asset...

stationery



To be clear...... Claiming stationery as a business expense is fine.
BUT..... as mentioned earlier in the thread it will only help you go over the 2% threshold that will allow you to cease being a limited cost trader, if it's 100% for business use only.

So if your ridiculously expensive stationery is business only then you can do it. But you will need to do it every year. At some point you need to consider if this is good business. I reckon you'll end up with a sh*t load of unused stationery, and the tiny profit you would have made on the FRS scheme has been swallowed up on those extra costs.
And any VAT on on accountancy, hotels, mileage and other expenses will not be reclaimable.

In short. Forget it.

[Old Greg]

You can justify a desk or chair and probably a lamp too for the desk.

Can my company pay for home office fittings?





I doubt HMRC would quibble over a suitcase though you could argue that it could be used for leisure.

You can claim additional costs such as individual business calls, and additional charges for heating and lighting.

Suitcase?? Really?

[ladymuck]

stationery



To be clear...... Claiming stationery as a business expense is fine.
BUT..... as mentioned earlier in the thread it will only help you go over the 2% threshold that will allow you to cease being a limited cost trader, if it's 100% for business use only.

So if your ridiculously expensive stationery is business only then you can do it. But you will need to do it every year. At some point you need to consider if this is good business. I reckon you'll end up with a sh*t load of unused stationery, and the tiny profit you would have made on the FRS scheme has been swallowed up on those extra costs.
And any VAT on on accountancy, hotels, mileage and other expenses will not be reclaimable.

In short. Forget it.

There's actually a provision in the rules that excludes the buying up of items just to reach the required threshold, IIRC.

[BlasterBates]

Suitcase?? Really?

If you can demonstrate that it is only used for work, yes. I found this on a questions for accountants website.

All expenses, to be allowable, must be necessary and incurred wholly and exclusively for the purposes of your business. Therefore if you would also use the bag for personal travel then it wouldn’t be an allowable expense.

Business expenses - inniAccounts

Anything bought that you use excusively for work can legally be offset as a business expense, there are no limitations. However if you overdo it HMRC will simply demand proof that it isn't used for leisure and reject it.

[Lance]

If you can demonstrate that it is only used for work, yes. I found this on a questions for accountants website.



Business expenses - inniAccounts

Anything bought that you use excusively for work can legally be offset as a business expense, there are no limitations. However if you overdo it HMRC will simply demand proof that it isn't used for leisure and reject it.

if your suitcase is a laptop bag, and the laptop is a company asset then it's clear cut.
I bought both for my last round of trips, the laptop bag was paid by the company and I paid for the suitcase.

[SueEllen]

Suitcase?? Really?

I haven't looked for suitcases with laptop compartments, but I've seen and actually know people who put their laptop in cabin size suitcases with other work papers.

I have a large rucksack with a laptop compartment which I put through my company. I got it when I was doing a lot of UK business travel. I have no need to use it otherwise.

[TheCyclingProgrammer]

The profit you can make on the FRS is often overstated anyway. You need to deduct the cost of any input VAT you’ve incurred that you would have reclaimed on the standard scheme (this is what the FRS surplus is designed to cover) to determine the true profitability and if you’re bumping up your expenses to qualify you’re likely reducing any profit you’d make on the scheme (not to mention your profitability in general by incurring extra costs).

Just stick with the standard VAT scheme. It’s not that difficult.

[Lance]

The profit you can make on the FRS is often overstated anyway. You need to deduct the cost of any input VAT you’ve incurred that you would have reclaimed on the standard scheme (this is what the FRS surplus is designed to cover) to determine the true profitability and if you’re bumping up your expenses to qualify you’re likely reducing any profit you’d make on the scheme (not to mention your profitability in general by incurring extra costs).

Just stick with the standard VAT scheme. It’s not that difficult.

The most I ever made was £2k. Which is not to be sniffed at. But if staying in hotels much it soon disappears.
I also drive rather than the train so can get VAT back on mileage.
I’d probably still be on FRS under the old rules, but it is pretty marginal as you say.