Claiming for your laptop as a business expense on your tax return is a handy way to reduce your tax bill, but the HMRC rules surrounding what you can and can’t claim are very strict. That’s because they want to keep things fair across everyone in the self-employed community. In this guide, you’ll find out if, when and how you can claim your new laptop on your tax return.
Table of contents
Updated 9 September 2021
1. Can You Claim for Your Laptop as a Business Expense?
When you’re self-employed, most of the things you pay for in your business will be an allowable expense, that’s because if it wasn’t for you working for yourself or being in business, you wouldn’t be paying for them. Allowable expenses are costs you can claim against your income when you calculate how much self-employed tax you have to pay.
Confused by allowable expenses? Then read my guide to claiming self-employed expenses.
When it comes to claiming your laptop as a business expense, if you use it for business reasons then you’ll be able to claim it on your tax return. But if you use your laptop for personal reasons then you’ll need to restrict how much you claim.
For example: if you use your laptop for 50% business and 50% personal, you will only be able to claim 50% of the laptop cost against your income.
2. What Records Do You Need to Keep?
Just like any other business expense, you need to keep receipts and invoices for the purchase of your new laptop. You’ll then need to keep hold of the receipt for 6 years as part of your business records, in case HMRC ever investigate your tax returns and want to see evidence of the costs you are claiming.
3. How to Claim for Your Laptop as a Business Expense on Your Tax Return
If you use cash accounting when you fill in your tax return, you can claim your new laptop as part of your business expenses in the tax year you bought it. You’ll need to make your claim in the self-employment section of your tax return. If your business turnover is less than £85,000 for 2021/2022 you’ll have the option to fill in the simplified version of this part of the tax return so only need to enter your total expenses. You’ll need to include your new laptop in the figure you enter alongside your other allowable business expenses.
If your business turnover is more than £85,000 you’ll need to enter a breakdown of your expenses in the boxes set out by HMRC and you’ll need to include your new laptop in other allowable business expenses.
Whatever your business turnover you should keep a note of what you are claiming for and how you worked it out as part of your business records, in case of an HMRC investigation and they ask for evidence of what you are claiming for to check you’ve paid the right amount of self-employed tax.
If you choose to use traditional accounting when you fill in your tax return, you’ll need to claim for your new laptop as a business expense under the rules of the annual investment allowance, which is a type of capital allowance that lets you deduct the full cost (business-related only) of your laptop against your self-employment profits in the year you buy it.
When it comes to claiming expenses, always use your judgement when it comes to deciding what you deduct against your taxes. Incorrect claims can result in penalties. And, as always, if you aren’t sure, seeks the advice of a professional.