Computer equipment tax treatment

irishguy

If my company purchases a laptop for say €1000. I get to claim back 23% Vat immediately against VAT charged,right?. Then over what period can I claim the remaining €770 as a business expense?

Synode

Apply capital allowances at 12.5% per year. This will write it off over 8 years.

Synode

If you bought it for €1,000 though and assuming it includes VAT at 23% the figures are:

Net €813
VAT (23%) €187
Gross €1,000

So you'd claim €187 VAT (immediately) and capital allowances of €813 (over 8 years)

irishguy

Synode wrote: »

Apply capital allowances at 12.5% per year. This will write it off over 8 years.

Is it the Revenue who sets this at 8 years? Also if the business ceased trading before 8 years, would it be classed as an asset (with whatever value that has not been written off?) I assume I would have to sell that then on behalf of the business and pay tax on the balance?

Also at the end of 8 years can I just throw out the laptop or take it myself, from a tax perspective?

Synode

Revenue does indeed set the 8 years.

Any residual value when the laptop is disposed is compared to the tax written down value of the asset (the €817 less what you've claimed in capital allowances so far) and a balancing allowance/charge is given/taken.

In reality, in 8 years time the laptop will be pretty useless and can be disposed of as you wish without any hassle from Revenue.

irishguy

Great thanks Synode