Sole Trader: Can I Reclaim IT Costs

clhs

So am just about to embark on some freelance consultancy work. I already have a Macbook, which I do not intend to claim for, but I need to buy some software specifically to perform the consultancy, such as Parallels. In total should be less than £100. Is this allowable?

Thank you.

00ec25

allowable = yes, but how you actually declare it and account for it depends....

read the stationery section of this, noting the 2 year rule:

https://www.gov.uk/expenses-if-youre-self-employed/office-property

Aquamania

clhs wrote: »

So am just about to embark on some freelance consultancy work. I already have a Macbook, which I do not intend to claim for, but I need to buy some software specifically to perform the consultancy, such as Parallels. In total should be less than £100. Is this allowable?

Thank you.

You cannot usually reclaim the costs.
Who would you have been hoping to recover the costs from?
Perhaps you should think about adding the cost to the bill (i.e. quotation)?

What you can generally do is set off against tax the cost of those items of expenditure wholly & exclusively used in the course of your business.
That would mean for a basic rate tax payer, something that costs £100 used wholly & exclusively in the course of your business could save you £20 in tax.

Note: as explained in the link provided by 00ec25 above, some items need to be offset against tax over a number of years (depreciated) to get the full benefit of such tax relief

Edit: I see from your ealier posts elsewhere that you may be a higher tax payer.
In which case, I suggest you seek the advice of an accountant, particularly as you have questions like this; the cost of accountancy will usually pay for itself in savings and in any event such accountancy fees are allowable for tax relief too

MrJones1

As a sole trader you have various expenses. If the expenses are deemed as allowable they can be deducted to work out your taxable profit. Private purchases are not classed as allowable expenses. In this case you need the specific software to perform the consultancy. So the cost for the software can be seen as an allowable expense. Computer software for business use falls within the category "Office, property and equipment". You can find more information on the Gov dot uk website.