Claiming a laptop as a business expense under Parasol

[helixus]

Hi there!

I am a new contractor, and I'm just getting to know how the things work with it, so please be gentle.

I am using Parasol as my umbrella company. I am planning to get a laptop (700GBP) and claim it as a business expense.

My questions are:

1) If the laptop costs 700GBP, how much would I be really able to save on it by claiming it as a business expense (I know that nobody can give me the exact number, but the rough worst case scenario estimate would do also)? Can you roughly explain to me how all this works? I am planning to stay with Parasol until late August, as I will continue my education in September.

2) I am planning to use it for training with the new software/operating systems/etc - is that a sufficient reason to claim it as an expense?

I am kindly looking to your reply! Thank you for your help with better understanding the business expenses laws!

Chris

[NotAllThere]

You have asked Parasol, haven't you? What do they say?

[DiscoStu]

Unless you're planning on giving your laptop back to Parasol when you leave I very much doubt you can claim any of it as an expense.

[malvolio]

Agreed, ask Parasol. If you had your own company it wouldn't be an expense anyway but a capital spend, but I'm guessing you don't own Parasol so you have to go by their rules. I expect they have a clear policy on this kind of thing, since you can't be the first to ask it.

[Archangel]

What the other said.

Plus:

The saving would be as follows (if you had your own ltd company):

1) If not on flat rate scheme and on 40% tax.

Laptop £700 (+VAT, reclaimed)
Or £700 dividend taxed at 40% so takehome £420

2) If on Flat rate scheme and on 40% tax

laptop £700+VAT = £822.50 (no VAT reclaimed)
Or £822.50 dividend taxed at 40% so takehome £493.50

3) If not on flat rate scheme and on 20% tax.

Laptop £700 (+VAT, reclaimed)
Or £700 dividend taxed at 20% so takehome £560

4) If on Flat rate scheme and on 40% tax

laptop £700+VAT = £822.50 (no VAT reclaimed)
Or £822.50 dividend taxed at 20% so takehome £658.00


HTH

[lambrini_socialist]

parasol will let you do this but you have to be happy for the machine to become legally their property - a formality of course but one you may not like.

the way they do their expenses and other accounting (and other brollies i expect) is so baffling, and can fluctuate so much, (not to mention how uncommunicative their payroll department are) that i don't include any gains made from expenses in my monthly personal budgeting, i just count it as a nice extra when it turns up. if you actually want to understand your finances/taxes and play an active part in them, you really really don't want to be with an umbrella (an expensive lesson i've only recently learned).

[SteveV]

surely you would have to get parasol to buy it in their name and with their card. My old umberella didn't allow capital expenses

[lambrini_socialist]

or rather, Parasol won't give you an exact figure or estimate because they don't actually know how much you'll get until their computer crunches the numbers on your payday, taking into account the value of the time invoice, how long it was since your last payday, the position of the moon in Capricorn etc.

[lambrini_socialist]

surely you would have to get parasol to buy it in their name and with their card. My old umberella didn't allow capital expenses

yeah, parasol do have an expenses guide that explains all this, i'm pretty sure they allow equipment (they certainly allow software), but i may be talking out of my arse. go and read the damn guide.

[helixus]

I read it, but it is all not stated very clearly. I will end my umbrealla contract in late August, and I just want to get a laptop now if I can save a couple quid on it. Parasol is not really helpful with that at all...