maximum value of an expense before it has to be accounted as an asset

[danio]

Anybody know what the most you can buy something for before you have to put it into the asset account? I have a £700 laptop that I'd rather not put on - is this kosher?

[boxman]

I'm not an accountant (so my comments may not be 100% correct) but...

Normally your laptop will be treated as a capital purchase and go into your company's capital pool. This will give you First Year Allowances (FYA) of I think it is either 40% or 50% on a reducing balance. So in year 1 you'd get 50% of £700 then in year 2 50% of £350 etc etc. This is not the same as the written down value in your books which is likely to be 20% per annum straight line depreciation (or whatever your accountant thinks appropriate for this class of asset).

I believe you *might* be able to expense an item which is specialised and required for a specific client assignment but this is unlikely to apply to something generic like a laptop IMHO.

Best really to speak to your accountant and get it right!

Rob

[Darren@UptonAccountants]

Assets

Anybody know what the most you can buy something for before you have to put it into the asset account? I have a £700 laptop that I'd rather not put on - is this kosher?

You would expect the laptop to last more than 12 months, it's an asset.

[malvolio]

Since capital assets have a beneficial impact on corporate taxation, the question is more usually "How little can I spend and capitalise an item", so I don't quite see your point here.

Speak to a proper accountant, but as a rule of thumb, if it's likely to last more than six months and cost more than £100, capitalise it.

[philip@wellwoodhoyle]

Is it a "new" asset, or a replacement. There is an argument that if all you are doing is replacing an existing laptop on a "like for like" basis, you can claim it as an expense under repairs and renewals. Obviously, if the laptop's spec is far superior and it does different things to a previous one, then it isn't a straight replacement. But we have had success in claiming new computers are merely replacements and therefore expense rather than capital, where the client has a policy of just buying whatever "bog standard" computer is the norm at the time, i.e. the standard Dell £300 PC, even though as years go by it has a bigger memory/hard drive, faster processor etc., it is still the bog standard £300 PC at the time of purchase and basically does the same job. Conversely, if you have a bog standard Dell £300 and then buy a super-duper higher quality make of PC., with loads of extra features that costs £2,000, it will be capital and you have no chance claiming it is merely a replacement because you aren't replacing like for like.

[TheFaQQer]

You would expect the laptop to last more than 12 months, it's an asset.

Not the way I use them!

Three years, three laptops, and counting.

[Sockpuppet]

The way I do it is if its expected to last over 12 month and is over £100 its a capital item.

I bought some tool (air line connectors) that are going to last maybe 10 years but at £60 each I cant be bothered depreciating by £6 a year.

[danio]

Since capital assets have a beneficial impact on corporate taxation, the question is more usually "How little can I spend and capitalise an item", so I don't quite see your point here.

Yes I realise it is a bit backwards, but never did the capital allowances in the corporation tax return. So if we ignore capital allowances I don't think there is a tax benefit to accounting it as an asset seeing as the value is so much less than annual profit, so CT will just be spread over a number of years rather than in one year but I think the amount of CT payable will be the same.

Speak to a proper accountant, but as a rule of thumb, if it's likely to last more than six months and cost more than £100, capitalise it.

For reasons of capital allowances this makes sense to me.