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Capital Allowances for larger or long-term items

Capital Allowances are slightly different to everyday expenses. HMRC understands that a business will have to purchase items to use on a daily basis as ‘general expenses’ – this could be paper for the printer, stock to sell (e.g. books) or stamps for postage.

Capital Allowances are seen as something ‘bigger’ which would usually last longer than a year. This could be a new computer or office furniture. Capital Allowances can be declared separately to your main income / expenses figures which are provided to HMRC.

However, if you’re a sole trader and have income of £150,00 or less, you can use the cash basis system, which means these are classed as standard expenses.

If you’re VAT registered or have a higher income, speak with an accountant to understand your options.

Further reading for Capital Allowances:

Updated on May 10, 2020

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  1. Slimming World Franchaise set up fee, I am a sole trader business in my first 12 months trading is this classed as intangible asset and therefore capital allowances claimable?

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