Claiming a laptop as a business expense

Knowledge base from Boox

By Lynne Gowers on 15th April 2015

Claiming a laptop as a business expense

As a freelance worker, consultant or small business owner, there are likely to be lots of essential tools that you need in order to do your job – and none more so than a laptop software and a phone.

Smart devices have become increasingly essential in the 21st century as a means of staying in touch with business contacts and sending assignments to clients instantly, be they magazine articles or graphic design projects.

However, did you know that rather than shelling out for a new laptop and absorbing the cost yourself, you can claim at least some of it back on expenses?

You may not have incorporated you company when you made the purchase, but if you keep copies of the receipts you can claim relevant costs. Remember you need to keep copies of receipts for 6 years (7 is best practice).

 

Contractors are eligible to claim for most of the expenses they incur as a result of working on their assignments, whether it’s travel costs or laptops. Tax relief (hence saving you money) can be obtained on these costs.

The ins and outs of business expenses

However, it’s important to remember that this only applies to equipment and expenses that are only ever used for work purposes, so you will need to categorise anything you want to claim back as ‘business use only’ and be able to prove that it is necessary for your job.

So, for example, if you only work on your laptop for 50 per cent of the time and use it for checking Facebook the rest of the time, you can only claim back 50 per cent on expenses.

For equipment including business computers, you will claim capital allowances.

Capital expenditure generally includes anything that you purchase and own to help you earn profits in your business, so laptops will fit into this category.

Happily, there’s no limit to the amount that can be claimed, so you can purchase whichever model you feel you need to help you do your work, but you must be able to prove how the purchase supports your role.

Remember that capital allowances will be deducted from your company’s profit when calculating the amount of tax you pay, rather than the total cost – and that the amount of tax you pay is not reduced by the amount of the expenses, but by the tax that would be due on that amount.

 

If you are a self-employed sole-trader rather than working for a limited company, you can still get tax relief on your business assets, such as laptops.

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