I have taken over the accounts for a limited company who are building a specialist software. All their work is done on their laptops. The company hasn't bought any laptops for the directors so they are using their own laptops and have done so since April last year. They use the laptops about 90% for work. Can I bring it into the company as an asset via the Director's loan account? One of the laptops as purchased as early as February 2013 so only two months before one of them became a director. Sorry if its a very basic question but I like to err on the side of caution :-)
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Laptop
Bring it in at market value and Dr assets, CR dla. As private use is minimal these days with computers there should be no B-in-K. Claim AIA if within the limits.
AIA can only be claimed on new equipment, and cannot be claimed on equipment introduced to the business by a director.
It can
Sorry it can. Whether new or old, it is new to the business, all be it second hand. AIA can be claimed.
I take it you are not an accountant
so please don't post on subjects you are not qualified in
I take it you were just being unnecessarily rude and offensive
I take it you are not an accountant
so please don't post on subjects you are not qualified in
Sorry Wayne, but I agree with Shirley.
The only exception would be if the director bought the laptop immediately before the trade commenced with the sole intention of using it for the business.
No
Any assets introduced to a trade are introduced at Market Value. I an not talking about pre-trading expenditure. This is a 'sale' from director to company. I have had this with HMRC in the past and it is a purchase so AIA is available as long as it was at arms length. If we beg to differ ring HMRC. I have done this for 18 years and HMRC have always agreed as long as the value is sensible. Kind regards.
what part
What part are you referring to - the change of trade has no relevance. I am interested.....
It is not a gift
As I said if at arms length Market Value I am right. There is no gift. That is why HMRC have always agreed with me.
Really?
Considering the what a second hand value of a laptop will be is it worth capitalising?
Up to you
Capitalising boosts the balance sheet rather than write of as an expense. If it is over £300 capitalise then depreciate.... makes the balance sheet look better
Wayne is correct - if an asset is introduced to a business regardless when it was purchased then AIA can be claimed. If the director fell under the connected parties rules then yes we would only claim the WDA, but even then we could claim SPA if under £1000. Write it off completely.
CA23084
General exclusion 5: where the asset has been received as a gift CA23040 or has been brought into use for the purposes of a qualifying activity having been acquired for other purposes, including leasing under a long funding lease CA23030.
Now for the OPs position, this may not be the case as they only recently acquired the equipment, but in general, I agree with Shirley M. If a director introduces an asset they previously used for other purposes, then exclusion 5 applies because it "has been brought into use for the purposes of a qualifying activity having been acquired for other purposes"
Certainly what I had always understood from various courses etc I have attended.
there was no need to
say that really to Shirley..
Wayne-Please do not mind me saying this BUT there are always better ways of saying things.
7 years on, but well said ArsalanShah. The amount of condescending, rude, unnecessary remarks made by people on this forum is completely uncalled for - yes I am referring to you Wayne.
Still goes on today, and really tarnishes this website.
I too, like you, will call these people out.
Oh @ Shirley, please ignore Wayne's comments, they serve no purpose.