100% Tax Deductable

Forgive me for being stupid, but if I bought say, a new desk for the office, then at the end of the year, your profit already takes into account the money you've spent on the desk, or is it, or are you saying you can then again deduct the amount from the tax due ?

If the desk is capital expenditure, it does not appear in the P&L, as it is a Balance Sheet item.

We've not had to do one yet, but surely the desk comes off your profit as its expenses ?

Strictly, no. However, the IR are unlikely to query *small* capital items as an expense.

How would do deal with (say) a 30,000 car? It's also an "expense".

No, it's a capital item. It has a residual value which should be shown on the balance sheet as an asset. Only a certain amount (the capital allowance) is deductable on the P&L. In theory the residual value is the value of the item in it's second hand condition, but it rarely is.

Now back to the original question, some items are 100% deductable, but a desk isn't.

tim

But would a computer desk be?

Duncan

"Duncan" wrote

Tee hee - I see what you're aiming at - IT expenditure? In that case, if you are an IT company - could *everything* be 100% tax deductable?!!

Yes, if the desk is made out of (working) cpus, pci cards, hard drives etc. :)

No, if made out of plastic/wood and the hardware just sits on top of it.