Flat-rating and pricey laptops

[lxt04]

I need to buy a new laptop, for various reasons it's quite an expensive one (I'm a mac developer and deal with graphics, so it's a Macbook Pro - no choice in the matter). The laptop is £1650 including VAT.

I'm on the flat-rate scheme, so I'm right in thinking I can only claim back VAT from the purchase if the item is above £2000.

I can add extra RAM, more storage space, etc, and bring the total to £2000. Since the VAT on a £2000 item is £350, this means with the VAT refunded the total cost to me would be £1650 - the price I was originally planning to pay.

So, unless I'm missing something here, I can basically get £350 worth of upgrades for 'free'? I guess this situation doesn't normally crop up all that often as most laptops wouldn't be that pricey, and it's only by chance the price of the model I want to buy is the same as the price of a £2000 item excluding VAT...

[Stag Cozier]

Without quibbling about your maths, the principle is there. If the cost of the laptop is £2000 or more (inclusive of 17.5% VAT), under the flat rate VAT scheme, your business can claim back the 17.5%.

[Maslins]

Your maths is a little out. When you're talking about a gross price of £2,000 the VAT is actually £297.87 (£2,000 is 117.5% of the net price).

Also, instead of the RAM etc upgrades you could buy (for example) a printer and scanner on the same order to bring the total gross cost over £2k. It doesn't have to be one specific item over £2k, more one group of items bought together.

[TheCyclingProgrammer]

Indeed; I've been holding off on my MacBook Pro upgrade until next week when I can order it at the same time as an iPad and bring the purchase to over £2k.

[tino]

Indeed; I've been holding off on my MacBook Pro upgrade until next week when I can order it at the same time as an iPad and bring the purchase to over £2k.

iPad?? Business Expense??

[b0redom]

Is this ONLY for laptops, or any IT expenditure? I'm looking at replacing my iMac and a few other PC bits with a single iMac maxed out for memory etc, and running everything in VMs.

I'd also consider getting RAM from Crucial, so does it all have to be from one supplier, or if I can demonstrate it's all going in the same box, can I buy RAM from Crucial, external drives from Scan, and an iMac from Apple?

Cheers...

[lje]

Is this ONLY for laptops, or any IT expenditure? I'm looking at replacing my iMac and a few other PC bits with a single iMac maxed out for memory etc, and running everything in VMs.

I'd also consider getting RAM from Crucial, so does it all have to be from one supplier, or if I can demonstrate it's all going in the same box, can I buy RAM from Crucial, external drives from Scan, and an iMac from Apple?

Cheers...

It's for any VAT expense - not just laptops and not just IT. However, it has to be on a single invoice - so must be from the same company. The things don't have to go together though - as long as they are on one invoice it's fine.

[Moscow Mule]

It's for any VAT expense - not just laptops and not just IT. However, it has to be on a single invoice - so must be from the same company. The things don't have to go together though - as long as they are on one invoice it's fine.

It's not for any VAT expense - it's for capital expenditure only.

i.e. You can't spend £2000+VAT on software for resale & claim the VAT back.

The thing about 1 invoice is correct.

My accountant reckons up you can probably include an extended warranty on the invoice too if you're buying one but wasn't very committal...

[lje]

It's not for any VAT expense - it's for capital expenditure only.

Ooops - my bad. I meant that but I didn't say it...

[TheCyclingProgrammer]

iPad?? Business Expense??

If you're an iPad/iPhone developer...yes. Which I am.