Must say that in about 25 years working as a software engineer I've never come across that sort of approach.
Sole Trader - is a laptop a capital expense?
- Thread starter machalla
- Start date
I would advise such a sole trader to claim capital allowances in relation to their first purchase of a laptop.
I would advise him/her to claim a balancing allowance equal to any unclaimed capital allowances in the likely event that the laptop gives up the ghost during the eight years.
I would advise him/her to expense the replacement laptop if it's broadly of similar specs and I would advise him/her to claim capital allowances in the event that it's an obvious upgrade of what they had before (taking into account the rapid development of laptops from one generation of equipment to the next).
I would advise him/her to claim a balancing allowance equal to any unclaimed capital allowances in the likely event that the laptop gives up the ghost during the eight years.
I would advise him/her to expense the replacement laptop if it's broadly of similar specs and I would advise him/her to claim capital allowances in the event that it's an obvious upgrade of what they had before (taking into account the rapid development of laptops from one generation of equipment to the next).
So if someone buys a top-of-the-range laptop and it sits down after say 6-9 months and they buy an almost carbon-copy replacement you would write-off the cost of both laptops in the same year, one via balancing allowance and one via expenses?
I can't see any Revenue inspector accepting that
Sorry ; but I do not agree with this approach
my 2 cents
Laptop 1- claim cap all's based on its value when you started using it --12.5 % / year
when it dies - claim the balance as a balancing allowance
Laptop 3 -- start again ---cap all's 12.5 % per year--
PS---if this is a very cheap laptop - <500 -just expense both of them
contemporary
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This is one area thats baldly need in reform, the useful life of any PC or laptop is no more than 3 years, anything after that is a bonus.
mandelbrot
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WHOOSH!
That was the sound of the point of Capital Allowances, flying over your head...!
You're not looking at the bigger picture here, by just focusing on a laptop. The rate of allowance is the same for all plant & machinery (with a very few exceptions), because it would be unfeasible for Revenue to determine, for every type of asset for every type of business, what the useful life of the asset is. Depending on the type of business it's put to use in, the same type of asset could last 3 years or 13 years. Some assets might have useful lives far longer than 8 years, but they are also written off over 8 years. The whole area is an exercise in swings and roundabouts.
I disagree with this generalisation - again based on decades' worth of experience working as a professional software engineer. Many of the PCs that I use daily in work are c. 6 years old and there is no pressing need to change them. Even older ones would suffice for general office/admin tasks.
contemporary
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WHOOSH!
That was the sound of the point of Capital Allowances, flying over your head...!
You're not looking at the bigger picture here, by just focusing on a laptop. The rate of allowance is the same for all plant & machinery (with a very few exceptions), because it would be unfeasible for Revenue to determine, for every type of asset for every type of business, what the useful life of the asset is. Depending on the type of business it's put to use in, the same type of asset could last 3 years or 13 years. Some assets might have useful lives far longer than 8 years, but they are also written off over 8 years. The whole area is an exercise in swings and roundabouts.
I think it should be value based, i.e. if it costs less than say 2k its an expense.I've heard of people being told to write off a €99 euro inkjet printer over 8 year, claptrap tbh
clubman said:
thats your "problem" you probably come from a background where code had to be complied in KBs, now developers are trained that big oul exes are fine because drives are up to TB's
However I'd hate to try and run a modern CAD app on your 6 year old machine
Years ago PC's were big ticket items, so could be treated as capital expenditure but with the cost of new machines less than €500 these days they are more like consumable items than capital items
My advice for that self same question was that any item in excess of €1000 cannot be an expense.
So you could buy an Apple Macbook (€999) and write it off as an expense, but an iMac (€1299) would have to be a capital item and written off over 3 years.
Bear in mind that the VAT for the item can be claimed back immediately.
So you could buy an Apple Macbook (€999) and write it off as an expense, but an iMac (€1299) would have to be a capital item and written off over 3 years.
Bear in mind that the VAT for the item can be claimed back immediately.