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Can I claim a new computer as a business expense?

A computer, or at the very least access to the internet, is a necessity for anyone working as an independent escort. So if you buy a laptop can you treat is as a business expense and claim relief? Or will the tax man deny you tax relief because there is personal non-business use as well?

The short answer is that if you use a computer for your business you can claim tax relief on the cost.

The same goes for any other ‘capital’ equipment that you buy for use in your business. That might include a satnav for getting to outcalls, or a bed if you rent a flat for work that is away from your main home, and if you provide dominatrix services it could include dungeon equipment.

If there is personal as well as business use of capital equipment you can claim for the business proportion. So if you buy a high spec computer that is used 50% for your business and 50% for online gaming you can claim 50% of the cost. However if the personal use is merely incidental you can claim the full cost. If it is an ordinary laptop that is used primarily for business I cannot see much difficulty in convincing any reasonable tax inspector that the personal use is just incidental. After all if it contains details of your business and your website you would hardly let your children use it for their homework, would you?

A couple of geeky points to finish off with:

  1. A computer does not have to be a business necessity for it to qualify for tax relief. This question was originally posed on the Saafe forum and one of the replies explaining why the cost of a computer could be claimed includes the sentence “It does not need to be totally for business use as the simple fact it is necessary, is enough.”  The answer they have given is correct, but the reasoning is wrong – for a self-employed business owner it is irrelevant whether expenditure is necessary – the only issue is whether the equipment was bought for, and is used for, the business. For example a satnav is not a neccessity – a map, or that thing that women are better than men at where they stop and ask for directions, would do as well – but if you choose to buy one for your business you can claim tax relief, subject to a percentage reduction for non-business use.
  2. Strictly you don’t claim tax relief on capital expenditure as a business expense but as capital allowances, but the tax effect is nearly always exactly the same. The only difference is that the claim goes in a different box on the Tax Return form.

 

 

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