Buy a computer for business -business laptops (UK)

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Introduction

When you’re a limited company contractor, what should you consider when you buy a computer for business use? As a UK business owner, can I buy a laptop through my limited company? When working via your own IT contractor company or as a UK contractor in any other industry, can you claim a new business computer through your business? If you claim, what are the benefits of buying a computer or professional laptop for business use? First, you can use your contractor laptop or limited company contractor computer for business-related work. This includes carrying out projects which are part of your contractor business. Furthermore, contractor business laptops (UK) or computers can assist many other areas of your company’s daily activities, some of which we’ll review below.

Can I buy a laptop through my business, or can I buy a computer for my business? This guide will consider where to buy laptops and computers and how to find the best small business laptop (UK). Moreover, we’ll investigate the best place to buy a new computer and how to find the best laptop company. Also, we’ll research purchasing a laptop through a limited company and where to look for laptops and computers. Furthermore, we’ll look at what to consider for the best work laptops for business.

This guide will examine the implications of an independent contractor using company equipment. Later, we’ll discuss what to consider when searching for the best laptop for your company. We’ll also consider how your company can receive a contractor business computer equipment tax deduction (UK). Furthermore, we’ll investigate the account’s treatment and VAT on laptops (UK) implications when you incur a limited company laptop expense.

Initial thoughts

In this guide, we’ll research how to buy computers for a small business. As a UK contractor, are you looking into buying the best laptop for small business owners? If you are, you may plan to use this for business purposes at home or work. Indeed, if you use your contractor limited company computer for business use at home, there are two other things to consider:

Many limited company contractors will likely seek the best office computer or laptop for business purposes. Moreover, some contractors and small business owners may search for the best laptop for working from home (UK). On the other hand, you may be looking for an ideal laptop for contract work when you’re away on business. Indeed, lots of contractors and small business owners look for new small business laptops (UK) or desktop computers at one time or another. When contracting or in business, it may be time to buy a new business computer through your limited company. Please read on to explore the benefits of purchasing a new company laptop or PC. What’s more, we’ll consider how to look for the best computers and company laptops for business owners when you’re buying a laptop computer.

How to buy a computer for business

Can you claim the cost of a new business laptop or computer through your company? 

Can I buy a laptop for my business as a business owner? If I can buy a computer or laptop for business use, can I claim the cost as a business expense? Basically, a contractor PC or professional laptop computer has a certain lifespan. Therefore, it’ll be treated as a business asset in your company rather than as an expense.

Besides searching for home business laptops (UK), when you look for a new computer for your company, how much is the cost of a contractor laptop bag? What’s more, how about other smaller pieces of business computer hardware or even a contractor computer upgrade? Therefore, will all these costs be regarded as business expenses? The answers here are all yes, provided you use the new business computer or limited company contractor laptop mainly for your business activities, and any personal usage is only minor.

Are you using a personal laptop for work (UK)?

If you’re in business and are using your personal laptop computer for work, it stands to reason you should be able to claim something as an expense. If you’re using this for work reasons much of the time, you could introduce this as a business asset. Therefore, when we research how to determine the fair market value of computer equipment, how do we do this? Estimating the fair market value when your business started would be best. As a result, you can bring this into your company at that value.

What about any personal use when you buy a computer or laptop for your company?

If you buy a business computer, it could be the case you use your computer regularly for personal reasons. When it’s the case, HM Revenue & Customs (HMRC) might see that this has a `duality of purpose.’ In this case, it might be a Benefit in Kind (BIK), and you must report this on form P11D. BIK is subject to:

  • Income tax for you as the individual; and
  • Class 1A NI for your company.

Business use when you’re buying a laptop for a small business 

When you buy a new company laptop, you must use it for business reasons. Indeed, the contractor limited company laptop business use should be regular, i.e., each working day. If any personal use is only minor, you can claim for the computer or laptop through your business.

Further thoughts when buying a laptop through a limited company 

Which tasks will you use a business computer for? 

As a UK contractor limited company, you may utilise your laptop for business use while on a client site. You’ll do this to perform your actual contract work. What’s more, you may use your contractor’s laptop for other tasks for your business. Therefore, when you purchase a new company laptop or computer, these tasks may include:

  • Maintain your business records. You could use an Excel spreadsheet or another accounts system. If your business is VAT registered, it must comply with Making Tax Digital. If so, you’ll probably use an online software accounting package, like FreeAgent.
  • Using any business software applications your company requires daily or occasionally. Depending on your skill set, you may need specific computer software for contractors in your line of work.
  • Promote your business on social media. You can do this manually at certain times during the week. However, many websites will help you set up posts in advance on your favourite social networks.
  • Send emails to your business’s customers, clients, and contacts.
  • Word processing, such as writing official letters from your business.
  • Web browsing via one of the search engines.

Which further tasks are there for your company laptop or PC? 

Once you have a new company laptop or computer, other tasks you may use this for:

  • Creating invoices to send to your clients. You could use a Word or Excel template. Some software-type packages will let you create invoices as part of their service.
  • If you have a business website, you can maintain this on your company’s new computer. Your work on the business website can include updates to your profile and work history. You can also advertise your business and market your services online. Furthermore, you can include updates on your skills and showcase your completed projects. Finally, other work could consist of general website updates and maintenance.
  • Graphic design type work and video editing as part of promotional work for your company.
  • Suppose your company is a growing business with several employees. In that case, you may look up the term `computer application in business.’ This will give you more ideas on business software to run your company’s administration and finances more effectively.

The financial benefits when you buy a computer for business 

Accounts treatment when buying equipment through a limited company 

Once you buy a laptop (UK) or PC for your company, the accounts and tax rules will govern how you treat your contractor laptop or computer and other computer equipment in your company accounts. Moreover, they dictate how to treat these for tax purposes.

When buying a laptop for business (UK), you may incur computer-type running costs when using it for work. Indeed, this could include software and printer cartridges. Furthermore, other costs may consist of online subscriptions and other small or low-cost items. It’s correct to treat these types of costs as everyday business expenses, and you can deduct these against your company’s profits, which are subject to Corporation Tax (CT).

As a UK contractor, you may ask your accountant if you can claim a laptop as a business expense (UK). You may also ask how a laptop is tax deductible (UK). When you look for the best computers or laptops for small business owners and buy a new computer, printer, extra memory, servers, or other contractor equipment, these items have a longer life than other consumable purchases. Therefore, in your company’s accounts, you must treat the new computer and any associated equipment as `Fixed Assets.’

Depreciation is a term used in accounting. It is the write-off of part of an asset’s value over several years. Therefore, we apply depreciation to Fixed Assets in your business accounts at a reasonable rate. The write-off of the value of the equipment in the business accounts occurs over several years. This is because assets don’t lose value until they are older or obsolete.

Finally, the depreciation we apply in the accounts isn’t tax-deductible. Instead, businesses claim `Capital Allowances’ (CA) against the equipment in its Corporation Tax workings. HMRC community forums contain advice in this area.

Capital Allowances (CA) when buying a computer for business

A UK business can claim the Annual Investment Allowances (AIA) under the current CA rules when you buy a business laptop or computer in 2024/25. The current AIA is £1 million annually, deductible against taxable profits subject to CT. From 2023/24, an allowance called `Full Expensing’ is now available, allowing a business to claim the cost of assets it buys against company profit. This offers 100% first-year relief to companies on qualifying new main rate plant and machinery investments (including a computer) from 1 April 2023 until 31 March 2026. To qualify for the new allowance, the equipment should be new and unused and only available for companies. However, you can claim the AIA instead if you buy a second-hand computer. Therefore, this is more than enough to cover a contractor’s IT equipment requirements when you invest in a new computer and other electronic equipment.

Your accountant will ensure they claim the correct CA for your business. Software such as FreeAgent will now let you treat equipment you buy for your company as Fixed Assets. Moreover, it allows you to select the depreciation rate and method used.

VAT issues when you buy a computer for business

The VAT Flat Rate Scheme 

If your business is VAT registered and uses the VAT Flat Rate Scheme, it can’t reclaim the VAT on everyday business expenses. However, you can reclaim the input VAT when buying certain assets, such as company equipment. Indeed, this is if the total computer or laptop cost (including VAT) is at least £2,000. Therefore, you can claim VAT on laptops and computer equipment for work. The types of equipment include small business laptop computers, desktop computers, and other electronic devices.

The above doesn’t mean you must spend £2,000 or more on one piece of kit. You can buy a laptop for business use and other equipment that’s part of the same PC setup at the same time. Therefore, purchasing a new computer for your company can include a printer, a scanner, extra monitors, extra memory, speakers, etc. Consequently, you can claim the VAT if the combined computer or laptop cost exceeds £2,000.

Suppose you buy a small business desktop PC or contractor laptop computer for your business. The computer costs£1,500, a printer costs £200, and memory costs £500. The total cost for your business would be £2,200. The VAT within this is 20/120ths or 1/6th, giving £366.67. Therefore, the cost to your company is £2,200 minus £336.67, which comes to £1,833.33. If your business is trading, it’ll save an extra 19% CT (£348.33) on this cost. Therefore, the bottom-line cost is £1,833.33 minus £348.33, which equals £1,485. In other words, the actual cost to your business is £1,485 for equipment, whereas the real value is £2,200. If you buy this equipment personally yourself, it’ll cost you £2,200. Hence, we’re sure you’ll agree it’s a worthwhile saving.

The Normal / Standard VAT Scheme 

If your company is VAT registered and uses the `normal scheme,’ it can claim back the VAT on any computer hardware it buys. Moreover, it can claim the VAT on all other everyday business expenses. In the example shown above, computer equipment costing £2,200 would again cost your business £1,485 if your company is trading.

Keep your receipts for a new small business laptop or PC and associated equipment 

When you invest in new computer equipment, please ensure you obtain and retain invoices or receipts for all computer expenditures. Indeed, this will include both equipment purchases and everyday running costs. The invoices should be made out in your company’s name wherever possible rather than to you. Please arrange this when you buy it from a shop or store. If you buy online, please make sure you obtain an electronic receipt.

More thoughts on how to buy a computer for business 

When should you buy a new laptop or computer for your company? 

If we consider the best time to buy a laptop or computer, the usual annual sales come around in the new year. Nowadays, there are Black Fridays and Cyber Mondays once a year. As a business owner, it’s vital to remember that if you purchase a new computer before your company year-end, you’ll receive tax relief on the current year’s tax bill instead of a future year.

Where should you start looking when you buy a computer for business?

Where do you begin your search when you’re looking to buy a laptop for business or investigating the latest business desktop computers available? You could start your search by looking for small business laptop recommendations and viewing some reviews to get ideas. What’s more, you could look for cheap business laptops for small businesses and see what comes up. However, if you find the cheapest place to buy laptops, you should do your research on what they’ve to offer. You could also search online for the best place to buy a computer or the best place to buy laptops. As a result, you could then consider buying online or travelling to the local store. Indeed, when we research buying laptops online and where to buy business laptops (UK), due to the many PC makers, there’s plenty of choice for desktop PCs and dedicated business PCs.

Finding the best place to buy laptops (UK) is a good start. Further, it is wise to search for company laptops with highly efficient processing power and present-day technology. There are many of the best contractor laptop deals out there, and depending on your price range, you should be able to find one suitable for your business. One thing to watch out for when you search for the best laptops for small businesses is that your new laptop computer has a long battery life.

When searching for the best business laptops or small business desktop computers, the latest operating system commonly used is Windows 11, although Windows 12 is now on the market. Windows 11 is one of the leading operating systems available when we look for the best laptops for business owners. In the future, we’ll see what Windows 12 brings.

What are the technical terms when you buy a computer for business?

Within the PC market, when you search for the best desktop computers for business and business laptops (UK), there are various technical specifications to consider as part of a contractor business computer purchase. Therefore, when you’re looking to buy a computer or laptop for business use, there are technical terms to watch out for. In your search, you’ll look for the best laptop computer for small business owners and UK contractors. Therefore, as part of your search for a new company laptop or PC, please consider the following:

  • The core processor. Intel Core is the leader in the market, and they recently released Intel Core i7 and, subsequently, Intel Core i9. Besides Intel processors, AMD Ryzen is another leader in the core processor market. Reasonably new on the market are quad-core processors -these have four independent units named cores, which read and execute central processing unit (CPU) instructions.
  • x1 Carbon is a product to watch out for, which features a solid-state drive (SSD) instead of a hard drive.
  • A sound dedicated graphics card. This component is a graphics processing unit that accelerates the processing required for creating and rendering images, animations, and videos. It delivers better performance and is commonly found in desktops rather than laptops.
  • The number of USB ports may be a factor depending on how many devices you plan to connect to your new computer.
  • A good-sized RAM. RAM is Random Access Memory, which stores and processes your current data. 16GB RAM gives sufficient memory to run as many programs as you require without slowing your computer down. This memory is enough for demanding software and other tasks like video editing.

What are further technical terms for the best computers for small business owners?

There are further considerations when you search for the best computer for business purposes or the best laptop for contractors. When you search for new PCs or the best laptops for contractors, please consider the following:

  • A good-sized hard drive for the long-term storage of various files. SSDs are now a common choice as they’re faster than hard drives. They also have more power, are energy efficient, weigh less, and make no noise. Furthermore, they come in more practical sizes/form factors.
  • Please note that data storage is measured in Gigabytes (GB). One gigabyte (GB) is made up of 1024MB, and one megabyte (MB) is made up of 1,024 kilobytes (KB). Similarly, data processing is measured in Gigahertz (GHz). This measures how quickly the Central Processing Unit (CPU) can retrieve and interpret instructions.
  • An external hard drive for extra storage space.
  • Cloud storage is another consideration for saving your data.
  • Furthermore, you should ensure your new computer has excellent authentication and access control security features.
  • Intel Iris XE is a popular choice for many small businesses’ desktops and laptops.
  • MacBook Pro, Macbook Air, and Apple iMac are other available options.
  • Lenovo Thinkpads are very popular. Also, a Lenovo Thinkbook is a good choice.
  • Mini PCs are now available, a fraction of the size of a standard laptop or PC. They take up far less space than a regular-sized computer and are less costly. Indeed, these are aimed at the gaming market. However, their functions are as quick as most normal laptop computers and desktop PCs.

Final thoughts 

In this guide, we’ve researched how to find the best laptops for small businesses. We’ve looked at what to consider as the best place to buy laptops (UK). Moreover, we’ve considered the ideal time to buy the best small business laptop computers. Further, we’ve researched what to look for regarding technical specifications for the best desktop computers for small businesses and the best business computer laptops.

Finally, when buying a laptop for business or a new computer as a contractor, you’re likely to use this mainly for work reasons. Therefore, when you buy a computer for business, your company can pay for this cost rather than you pay for it yourself. As a result, your company will receive tax relief.

Link to Contractor Advice UK group on

LinkedIn    https://www.linkedin.com/groups/4660081/

Published On: April 6th, 2024 / Categories: Expenses, Expenses Guides, First timer guide /

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