Self employed - expenses

Jet

I do a small amount of self employed work for which, I have to use a computer. I have just upgraded my home pc and was wondering how much I can claim for as a legitimate business expense.

The pc will be used for 90% private use and 10% approx for the self employed work.

Can I claim the whole amount, a percentage or nothing at all?

strawberry_smoothie

Jet wrote: »

I do a small amount of self employed work for which, I have to use a computer. I have just upgraded my home pc and was wondering how much I can claim for as a legitimate business expense.

The pc will be used for 90% private use and 10% approx for the self employed work.

Can I claim the whole amount, a percentage or nothing at all?

Hi

I depends how this self employed work was done.

Were you working as a LTD compnay? If you were you would be able to claim the full amount for the the pc (I've just done this about a week ago), any pc applications, broadband usage (available in your area). :money: :beer:

If you are not trading as a Ltd company, I'm not sure . What I would recommend is that you ring up an accountant and ask what you are entitled to.

Hope that helps/

fengirl_2

You cannot claim the pruchase of the PC as a busines expense, but you can claim capital allowances. The first year allowance is 50% and its 25% thereafter. The allowance will be reduced to the actual business use, ie 90% in your case.

Jet

Hi,

Thanks. I'm not a ltd company just self employed individual.

So, fengirl, does that mean I can claim 10% of the cost of the pc as capital allowance. I'm in my second year of "trading".

fengirl_2

No, your capital allowance claim will be 50% of the cost in the first year:
example PC purchased for £1000, CA's are £500, less private use 10%, allowance £450.
In the second year, your brought forward value of the PC is £1000 - 500 = £500. Allowance is 25% or £125, less 10% private use, making £113.
In the thirsd year your brought forward allowance is £375.
You can go back and make a claim for the first year as you have 6 years to claim allowances - just write to HMRC and state you are making an amendment to your self assessment for 2005/6 and are claiming £450 capital allowances for that year.
There is no point in your becoming a limited company if your self employed work is very small, especially if you have no staff, premises or large creditors.

Cook_County

fengirl wrote: »

No, your capital allowance claim will be 50% of the cost in the first year:
example PC purchased for £1000, CA's are £500, less private use 10%, allowance £450.
In the second year, your brought forward value of the PC is £1000 - 500 = £500. Allowance is 25% or £125, less 10% private use, making £113.
In the thirsd year your brought forward allowance is £375.
You can go back and make a claim for the first year as you have 6 years to claim allowances - just write to HMRC and state you are making an amendment to your self assessment for 2005/6 and are claiming £450 capital allowances for that year.
There is no point in your becoming a limited company if your self employed work is very small, especially if you have no staff, premises or large creditors.

Just a minor point - fengirl has this back to front. It is 10% business use, not 10% private use. The theory is correct.

fengirl_2

Whoops, so sorry, misread the question.