Sole Trader Costs Question

M

marcin

Registered User
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Hi,

I always have the same problem becasue I want to be 100% Fair and square with revenure and have no problems.

I have a buisiness where one of my servcies is Professional Photography. And Dvd presentations etc.

So when I buy a Camera and get invoice for that can I put it in my books as a cost and use vat for claiming vat?

The same with a TV for presentations. I need tv in the office to show presentations to clients. So whe I buy a TV can I put it in my books as a cost and use vat for claiming vat?

My problem is that if you look at "Camera" or "TV" you instantly get impression that this is Personal use stuff. That what reveneu would think right? I don't know. Obviously I will use camera once in a while for private photos.

Any advice?
Thanks!!

PS. I'm Soltrader, registredr for VAT (if that helps)
 
Hi Marcin

I understand your concerns but in the event of an audit, Revenue will always listen to your reasons for including certain expenses in the accounts of your business. Their guideline is that an expense must be incurred "wholly, exclusively and necessarily" in the course of running your business. Basically, if you can show why these help the business and that they are indeed used in the business, I don't see you having any problems.

Yes, any Vat you pay on expenses that satify the above can be used as a Vat credit.

Be aware though, a camera, a TV or a DVD player would have to be capitalised as they you would get the benefit of them over more than one year. They are assets (capital items) as opposed to general costs (revenue expenditure). Basically, they would sit in the balance sheet and get written off to the P&L over a period of time.

If you're unfamiliar with this, get advice. The whole area of depreciation and capital allowances isn't completely straight-forward.
 
billythefish said:
...The whole area of depreciation and capital allowances isn't completely straight-forward.
Click to expand...

True enough, but the VAT question is: it's allowable, and can be claimed in full at the time of purchase. It is advisable to ask the vendor for an invoice showing the VAT element.

I note that you want to be entirely straight with the revenue (a sentiment I applaud). They are generally sensible people, and would not be concerned if you occasionally used the camera for personal pictures, so long as its primary use is for the business. It's not like a car, where personal use adds something to depreciation (and where people in the past really took liberties).
 
RE capital items - are they really that bothered over small items? I have put some capital expenses against current year tax, eg office furniture and laptop- would you think this is a problem?

Can you put the cost of leasing a car against tax? Or part of it?

Above questions re sole Traders.
 
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