Are capital allowances available on wedding albums purchased by a photographer to show as samples to potential clients?

Are capital allowances available on wedding...

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Hi all,

The situation I have is a wedding photographer who has incurred a significant amount of expenditure purchasing a small number of wedding albums for the purposes of showing to potential clients - studio samples. They are marked as studio samples. I was considering them for Annual investment allowance as they are not cheap, and are used going forward in the business, however the concern I have is that it might be too much of a stretch to describe them as "plant and machinery" for these purposes.

They could of course be put straight to the P&L as advertising, however they are likely to be used for more than one accounting period, so it doesn't look like the appropriate treatment.

Would be grateful for anyone's thoughts on tax relief for these items.

Thank you.

Replies (4)

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By eastangliantaxadvisor
19th Jan 2014 13:42

If they have a life of two years or more, then HMRC will allow them to be treated as "plant" and therefore you can claim capital allowances on them, and AIA's if applicable.

 

If their life is less than two years, I would write them off an expense in the accounts and claim relief that way.

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By fpdbookkeeping
19th Jan 2014 13:48

That's great. Cheers thanks.

 

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By The Innkeeper
19th Jan 2014 15:34

Not so sure

Consider the case of Rose & Co( Wallpapers & Paints) Ltd v Campbell ChD1967 44TC 500. Company which sold wallpaper claimed capital allowances on its wallpaper pattern books. Commissioners rejected the claim holding that the pattern books were not plant . ChD upheld the decision.

 

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By raychidell
20th Jan 2014 12:11

Agree with first reply

I agree that they are plant if they have a useful life of at least two years, and should be written of as an ordinary expense if less. The reason the Rose & Co case was lost was because the items in question did not have a long enough useful life. That issue aside, I think they would clearly come within the definition of plant (which is in fact interpreted very widely).

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