Just working through other halfs tax return, he runs a small automotive body repair/paintshop business as a sole trader. He has purchased a number of small tools that will probably need replacing in a year or two. How would you account for this? Would I put them as a an expense and write off against profit (therefore reducing tax liability?) or put them as a fixed assset and depreciate them at 50%.
The figures are relatively low, about £350 for the year (will be higher current tax year, but still under £1000), so not a huge impact on profit, but will reduce the amount of work needed in upkeeping a fixed asset register.
To me a fixed asset is something that will last more than a year or two, so three years and above with a value of at least £100. So provided these tools cost less than £100 and will last less than 3 years I would include these as an expense.
But that is just my opinion, others on here may disagree
