Charging my business for the use of my private assets

[dominique_m]

Hello!

I got another question.
Sorry, I once asked something related, but now, I thought it over and the case is a bit different...

As one can claim expenses when using their private car or bike for business purposes, one could certainly claim the same for other private assets used by the business...?

More precisely, I wonder if it wasn't better to buy the computer (laptop) privately and charge my business (sole-trader) for the use of it. (I couldn't reclaim VAT anyway)
Are any disadvantages to this or could HMRC make problems?

Cheers,
Dominique

[accountantpete]

What does fluchtigkeitsfehler mean ?

If you are a sole trader you simply bring in all expenses and then deduct a private use element to end up with the allowable expense claim.

You could charge an element of an expense like a computer to the business but the Revenue wouldn't like it if the amount charged over a number of years exeeded the original cost- so I would bring it in as suggested and claim capital allowances on it.

[dominique_m]

thank you for the answer!

And... if I intend to run the business just for a certain time, e.g. for about one year, so buying an item for the business which I also partly use privately and after the business will be closed, would like to keep privately?
In this context, would HMRC maybe better understand my wish?

In any case, I don't intend to claim more money this way, I just think about avoiding buying something for business and then buy it from my business not so much later.
I think that, if I bought the computer for the business and only kept it for a year, I would have to repay the surplus of those assets claims of 100% I could make in the first year of purchase and have to look up the reselling value of the computer after that year... and anyway, I couldn't claim VAT on the purchase as I head for flat-rate scheme (in case I hit the VAT registration turnover limit) and the computer would cost less than 2,000 pounds.

Sorry for the long explanation, but probably this was necessary to explain my case. (And I hope I was understandable, I'm not an english native)

I'd be thankful for advice!
Cheers,
Dominique

PS. Sorry, was a bit lazy - now I looked up 'Flüchtigkeitsfehler' and *leo.org* says: 'oversight' or 'slip of the pen'

[accountantpete]

There are 2 aspects here Dominique.

1) VAT - you don't need to repay vat on capital goods if the total value at close is less than £7000. The value is the market rate for those goods not the original cost price.

2)Tax - Again the value of the item is the key factor - so you simply value the computer in a reasonable way(ie how much would you get for it on eBay) and your total claim against tax is restricted to the amount that the computer has gone down in value from cost.

In otherwords this is no problem as regards tax if you simply bring the whole cost of the computer in.

[dominique_m]

Hello again,

I understand 2) well, but I am not sure about 1)

"1) VAT - you don't need to repay vat on capital goods if the total value at close is less than £7000. The value is the market rate for those goods not the original cost price."

Does this apply to items I buy for my business and later sell them? (Also if my business sells the items to myself)
I just wonder, because usually when a business buys items without VAT and resells them to consumers, it has to pay the VAT to HMRC.
Is here a difference, because you talk about capital goods, not merchandise?

Cheers,
Dominique

[accountantpete]

For vat purposes - if you bought a computer for say £600 which has vat on it of £90 giving a total of £690. You can claim the vat back.

If,when the business ceases, the computer is valued at what it's worth say £300 - because this is below the £7k limit you don't have to repay any of the vat.

I don't want to confuse you but if the vat on capital items and merchandise left over when the business ceases is less than £1,000 then you don't have to repay any vat originally claimed. This £1,000 limit equates to a total value of just over £7,000.

[dominique_m]

Thanks a lot, accountantpete, your were very helpful!

Cheers,
Dominique