I have i believe, been correctly claiming as part of my AIA (annual investment allowance) the full cost of all the major bits of kit ive purchased ie. anything petrol powered, battery hedge trimmers, laptop, van! etc
I have not included as part of that AIA any small hand tools, or anything under say £20 that is likely to only last one season before either wearing out or ultimately breaking, a trowel for example. These are included as part of my normal business expenses, which i thought was the right way to do it, i didnt think small hand tools would be classed as 'plant and machinery'
My question is, is that correct, or should i be claiming for every single item that would be classed as a tool, wether high value or not? i was on the business link website and accidentally clicked on a capital allowance link which got me thinking as to wether i was actually claiming for stuff correctly!
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Capital assets tend to be major items that can be depreciated and qualify for AIA - for which the allowance has/is changing?
Certainly you should claiming as an "expense" every single item/tool you legitimately purchase for the business.
Really recommend you discuss this in detail with your accountant as they will know your books and what you can/cant do. This is why a good accountant is such a good idea and worth it.
Your accountant should not let you miss a trick....:-)
Gary thanks for your reply
I am my accountant!
I do in deed claim all smaller, cheaper tools as a business expense, but reading about capital allowances it implies, to me anyway, that 'all tools' can be considered 'plant and machinery' along with the larger and more expensive items, and as such are part of any capital allowance, and although it seems a bit daft, can be 'depreciated' in the same way
For any one starting up as a gardener they should be aware, and any good accountant would advise, that if they own any tools or equipment in a private capacity then they can, if they so wish have them transferred over to their new business and make a legitimate claim for AIA and /or expenses.
Generally this would be hand tools but a suitable mower, hedge trimmers, ladders etc can all have their value taken into account.
Battery hedge trimmer???
That aside, get an accountant. I am a one-man-band but my accountant pays for himself every year in finding things I'd not have claimed, let alone the peace of mind you get from knowing everything is totally legit. Computers are claimed differently, I believe, and it's a minefield as to what's a "consumable" tool or a "capital purchase" that needs to be written down over several years.
I change most petrol-powered tools after a couple of seasons. I still have my first trowel after well over 20 years!