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Claiming tax back for computer equipment

muggz
Posts: 97 Forumite
in Cutting tax
Hi all,
After much searching on Google I thought i would ask here as I cant find the answer. In the last 2 months I have become self employed and I have realised alot of my computer equipment is out of date.
I want to buy a new set up however I have heard that you cannot claim tax back for the equipment straight away as it is staggered over several years. I am only planning to be self employed for one or two years so forking out a lump of cash I may not get back is a bit of a risk.
Does anyone know if that is the case?
Thanks in advance
After much searching on Google I thought i would ask here as I cant find the answer. In the last 2 months I have become self employed and I have realised alot of my computer equipment is out of date.
I want to buy a new set up however I have heard that you cannot claim tax back for the equipment straight away as it is staggered over several years. I am only planning to be self employed for one or two years so forking out a lump of cash I may not get back is a bit of a risk.
Does anyone know if that is the case?
Thanks in advance
0
Comments
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My understanding is that the rules have changed recently, so you need to find out about the Annual Investment Allowance. You will probably be able to claim 100% of the cost of your equipment.
Mind you, remember that you don't get the cost of your equipment back, you only get tax relief on the cost.0 -
Hi tyllwyd,
Thanks for the reply.
Ah great, its good to know I need to be searching for the term Annual Investment Allowance, that helps alot.
By tax relief do you mean, if I buy a £500 pc, I wont have to pay £500 of taxes?0 -
No, if you buy a £500 pc, then that is £500 that you don't have to pay tax on. So if you pay tax at 20%, it would save you £100 in tax.0
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Also remember if there is any private use of the computer(s)/equipment then you will need to have a separate 'asset pool' in your capital allowances computation when working out how much you can deduct from your turnover. There should be more about capital allowances on the HMRC website.
Capital allowances are pretty much the tax world equivalent of depreciation.0 -
Yes, add all this to your hardware pool in order to receive a staggered allowance - used to be 40% in first year then 25% to follow (from memory). A quick call to your friendly IR will generate the correct information - they really can be helpful.
For a few years there was a 100% allowance on IT kit - alas, not any more!0 -
Yes, add all this to your hardware pool in order to receive a staggered allowance - used to be 40% in first year then 25% to follow (from memory). A quick call to your friendly IR will generate the correct information - they really can be helpful.
For a few years there was a 100% allowance on IT kit - alas, not any more!
http://www.content4reprint.com/finance/taxes/business-tax-reform-in-the-uk-introduces-annual-investment-allowance.htm0
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