I assume that it was legitimately for the business? And it was purchased wholly and neccessarily for the business.
If not it's drawings (including the VAT).
If the purchase was legitimate (i.e. it was a photographic studio or something similar) and the price was immaterial (which I would hope that £200 is to your clients business) then at £200 I would agree with Lorraine and say expense but from £250 I would capitalise regardless.
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Actually that was a bit of a sweeping generalisation.
I've capitalised a printer before that only cost £100.
The £250 is just a set figure that below that one needs to think seriously about whether it should be expensed and above that it seems more likely than not that if it will last for more than one period then it should be capitalised.
I know that many on here set the figure at £500 and really everything should be relative to the size of the entity being serviced but my ball park figure is £250. And as with all rules it does get broken.
In my defence, in my original reply I did say "I would" rather than "you should"
Not that it makes any difference for tax purposes either way.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
No that's fair enough, I just thought it was a bit of sweeping statement when sometimes things need to be looked at in terms relative to the size of the business and the useful length of the item, which is what you then just said!
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
