I'm trying to complete my own self assessment, first time - I need to find out if my Sage accounts, payroll software (needed to run my business) MS Office, new desk, chair, desktop and laptop computers are included in capital allowances?
You've not really provided enough info, but generally speaking it comes down to what you've capitalised. We don't tend to capitalise accounts and payroll software, as (a) it tends to be a licence (b) it tends to be £100-£200, and (c) it's not really an asset you would sell.
Also, we don't tend to capitalise anything costing less than £100 (have seen other accountants capitalise things like a kettle costing £20!). Anything above not capitalised would be treated as revenue expenditure.
Laptops would be capitalised. You should be able to claim 100% tax relief under the Annual Investment Allowance (AIA).
Thanks Nick. Sorry I wasn't more specific but Sage Accounts Professional and Payroll cost me over £1k for the software and Office over £350 - both needed for business. I think I should buy and do the ICB Self Assessment as I feel like I'm drowning here!!
I would never capitalise software, As Nick says, you don't actually own it and you can't sell it. It's revenue, pure and simple. It is tax deductible so it really makes no difference to what you will have to pay.
To be honest with a small startup business any capital items usuallly come under the annual investment allowance anyway so from a tax point of view it doesn't really matter.
I tend to use a capitalisation threshold of £500 before I consider it. This varies among accountants but as long as a consistent approach is used HMRC should be happy.
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