Spreading capital allowance over three years still fine?

Hi, I'm just going through my self-assessment and about 10 years ago when I was using an accountant, they suggested spreading the cost of a computer bought for my self employed music work from home (and solely used for that purpose) over 3 years as a capital allowance (33% each year).

In the 2022-2023 tax year, I bought a new audio interface and would like to spread the cost over 3 years again rather than claim the cost in one go. Is this still acceptable? I don't use an accountant any more otherwise I'd ask them!

Comments

  • Veteransaver
    Veteransaver Posts: 324
    Name Dropper First Post
    Forumite
    I'm not sure why you'd want to expense it over 3 years rather than just 1 (which for most things you can just claim 100% against expenses, if you are talking for tax reasons. Is it a particularly expensive piece of equipment or is your profit very low?
    You used to have to write it down over say 3 years but this changed some years ago.
  • SeanM42
    SeanM42 Posts: 5
    First Anniversary First Post
    Forumite
    Yep, profit is low. So I can no longer spread it out over a 3 year period?
  • Jeremy535897
    Jeremy535897 Posts: 10,375
    First Post First Anniversary Name Dropper
    Forumite
    You can claim exactly the right amount in year one to reduce your profit to such a figure that your total taxable income is £12,570, say. You carry forward the balance in a pool and can claim 18% writing down allowance (reducing balance) in future years, unless you use the cash basis. If you do use the cash basis, you have to claim it all as an expense in the year you paid for it.
  • SeanM42
    SeanM42 Posts: 5
    First Anniversary First Post
    Forumite
    I use the cash basis and always have done. Do I put it through as annual investment allowance or as an expense? 
  • uknick
    uknick Posts: 1,604
    First Anniversary Name Dropper First Post
    Forumite
    If you're using cash basis accounting you can only claim capital allowances for cars.  Therefore, in your case, it would be a one off expense in the year you paid for the item.

    If you want to use capital allowances, why not change to accrual based accounting?
Meet your Ambassadors

Categories

  • All Categories
  • 341.7K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449.2K Spending & Discounts
  • 233.9K Work, Benefits & Business
  • 606K Mortgages, Homes & Bills
  • 172.5K Life & Family
  • 246.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards