Depreciation & capital allowances on small assets

Hi all,

I know this was covered before but I have a question regarding depreciation and capital allowances. I think it makes no sense at all to include a small asset, for example a PC monitor bought at 150 there; however anywhere I read here people are saying this must added under capital allowances. On my books I would like to depreciate it in the first year as it's such a small asset, but if someone could clarify if it is possible not to include it under capital allowances I would be most grateful. I found accountancy policies of couple universities (or they departments/labs) regarding capitalizing assets and it seems they don't capitalize any computers for example, if they are worth below 5,000. How does this work then? Here's an excerpt:

• Items of equipment & computers are captured on our Equipment Register if they have an individual value of €3,000 & over. Items of individual value of equal or greater than €5,000 are then 'capitalised'.

Source: UCD

And here is another one:

DIT lab equipment policy is

• Any lab equipment invoice under €3000 is classified as an expense (& has no deprecation charge allocated to it)
• Any lab equipment invoice over €3000 is depreciated over 5 years (with invoice for €3,000, these assets would have an annual depreciation charge of €600 for the following 5 years)

The DIT computer equipment policy is

• Any computer invoice under €3000 is depreciated at 100% in year 1 (& has no deprecation charge allocated to it)
• Any computer invoice over €3000 is depreciated over 3 years (for example 5 computers on one order costing €700 each would be depreciated over 3 years & would have a collective annual depreciation charge of €1,000)

Source: DIT

Can someone clarify how does this work as I'm getting a little confused with this stuff...

Thank you!

Those are accounting policies, and irrelevant to the correct tax treatment, which you seem happy enough you understand.

Thanks, so basically there is no other way around it and even a small purchase such as printer or monitor has to be included under capital allowances at 12.5% for the period of 8 years? I guess simply including it under expenses is not something that can be done? I'm talking here couple hundred euros and it's a major inconvenience for a sole trader for such a minor amount...Any other options I have?

None that I am aware off.

Many years ago, while working in one of the Big 4 accounting firms, it was agreed with the Revenue that a major multinational could expense every item under £3,000 (that is how long ago it was) as this was their accounting policy in the U.S.

It took a massive amount of work to get the matter agreed, the expense was written off over two years and the capital allowances at the time were granted over a shorter time than they are now.

As with yourself I'd be interested to know if there is any practice in this area for small expenditure.