self-assessment - computer use

[PickleFish]

so I bought a new computer this year. I need email for my work, and I use it for some designing/programming that I am trying to sell (though haven't yet made a profit). I assume I can claim it and then split it into business and non-business use. But do I start with 100% of the cost, and then split that? Or can you not count all of it in the first place? I remember one year having to claim something like 50%, and then 50% of the remainder the next year, and then 50% of that remainder after that, etc. But then last year I seemed to have claimed 100% of my computer equipment to start with, and then split it into 40% business, 60% non-business. Or the other way round. It's so hard to decide what % is reasonable. I'd not have bought this particular computer in the first place if not for work, but of course once it's there, then I do use it for lots of personal stuff as well.

REally hard to work out the percentage of house that I use too, to claim gas/elec/phone/broadband bills. I was claiming 25%, but that sounds too high (I teach in the house). How do they check these sorts of things? I might claim 15% instead this year, as I'm more afraid of not being able to prove things properly and having to pay loads back or something.

If you are using the computer for design and programming that you are selling (or are intending to sell) as part of your business then in many cases it would be resonable to consider it as wholly a business asset and that any personal use is incidental.

You are right that you can't usually claim the whole of the purchase cost of a computer as an expense, it is claimed as a capital allowance. However for 3 years now there has been an Annual Investment Allowance (maximum £100,000 in 2010/11) which means you can claim the whole of the (business proportion) of the expenditure on the asset against tax - just remember to put it in the capital allowances section of the tax return.

The HMRC rules on deductions for the use of your home in a self employed business are complicated. If you don't have a specific room that is used mainly for teaching (and preparation, admin, marketing etc.) then 25% does sound high.

I am assuming that you are self employed? There is a special mumsnet topic for this, although most of the sensible people that answer questions there read this topic too I think.

Thanks, I will check out that topic.

Yes, I'm self employed, teaching. I have an office room that holds all the books and equipment and so on (and isn't used for anything else) but I now teach downstairs in the sitting room for safety reasons. It's a pretty small house though, but maybe 10 or 15% would be a better estimate.

And the computer was bought (Apple) because it was better for the designing work, but it's replaced everything else really now and I do lots of other stuff on it too! So maybe I could say 50% of it or something - that's well under the limit then (very few other expenses, just books and stationery and stuff, not capital equipment), so if I claim the £250 for that (50% of £500), hopefully that should be OK??

If one room is only used for your business then you can claim for that room. The way this works is you count all the living and sleeping rooms but not kitchen, bathrooms, utility etc, so say if you have 3 bedrooms a lounge and a dining room thats 5 habitable rooms, so you could claim 20%. You can include electricity, gas, community charge, rent or mortgage interest, buildings and contents insurance etc. Telephone and internet bills you need to come up with a fair way to split based on usage.

I would be inclined not to claim any on top of that for the use of the sitting room for teaching.

Your logic on the computer seems sensible, but all apportionments are subjective so there are no guarantees.

Usual disclaimer applies - the above is provided for information only and does not constitute professional advice.

Thanks. It's quite a small house, 2 beds, the office, sitting room, kitchen, and bathroom/utility. The sitting room is kind of two rooms knocked into one, though! So I guess that's four rooms, which is maybe where I got the 25% originally from. It seems unfair to me to count it, somehow, when all I do it store the materials in there and sometimes plan, but do the actual teaching downstairs! (I don't count anything on top for the sitting room, but just assume that it kind of is in place of using the office). I teach for about 5 hours a day, I guess, but don't use the office for anything else (but do use the sitting room!).

I guess what scares me most is that if I get it wrong, they will come after me for loads of money. I'd almost rather not claim anything, but that's not really very helpful either!!

I suppose it's pretty hard for them or me to really prove what I do on the computer, frankly. I tend to use the Apple for the internet just because it's here and all set up, but there's no reason I couldn't use the laptop instead and just be using the Apple for work, even if it was just a small amount a day - and then I'd have claimed the whole thing, even though no more hours were used for work than are now!! So choosing something sensible like 50% seems reasonable to me, just worried that it won't to them. They've never checked so far, but one day I guess they will!

thanks.

this thread is very fishy...