Allowable Expenses on tax Return - Capital Item question

[Paulzie]

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Looking at filling in tax return, and am trawling through the "Allowable Expenses". One of the exceptions is capital items and it explicitly mentions computers as being not allowed.

Am I right in thinking I claim this as "depreciation"? So if I bought a £1000 PC, I can charge say £333 depreciation per year as an allowable expense?

[dc000000]

A computer is an asset - like plant and machinery.

However, you can creat a 'pool' of plant and machinery and so long as your 'pool' is valued at less thean £1,000 you can write off the entire amount in the first year.

Do a search of 'capital allowance pool' or something like that for the technical answer

In short - you can claim it so long as it's less than £1,000 - you just put it in a different part of the return under plant and machinery (or whatever it's called?).

I'm not an accountant btw - bet you didn't guess that eh?

[Mogga]

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Keith might well have some info on his site.

[hrbs]

Looking at filling in tax return, and am trawling through the "Allowable Expenses". One of the exceptions is capital items and it explicitly mentions computers as being not allowed. Am I right in thinking I claim this as "depreciation"? So if I bought a £1000 PC, I can charge say £333 depreciation per year as an allowable expense?

Hi

You can claim 100% Annual Investment Allowance in the capital allowances section of the self employment pages (the limit is £50k of plant and machinery, subject to certain exceptions, but computers are OK).
Depreciation is not an allowable expense for tax purposes because it is replaced by capital allowances.
The amount that you have entered as depreciation in your accounts will also need to be entered in the relevant disallowable expenses box.
The HMRC helpsheets are HS222 (Calculating your profits) at http://tinyurl.com/3a6t5mt
and HS252 (capital allowances) at http://tinyurl.com/3ymedyz

Make sure you are claiming all expenses you are entitled to by reading our free guides at tips.HRBS.biz .

Regards

Keith
HRBS.biz