When you’re a limited company contractor what should you consider when you buy a computer for business use? As a UK business owner, you may ask can I buy a laptop through my limited company? When working via your own IT contractor company, or indeed working as a UK contractor in any other industry, can you claim for a new business computer through your business? Basically, if you can claim, what’s the benefits when you buy 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, when using contractor business laptops (UK) or computers, they can assist many other areas of your company’s daily activities, some of which we’ll go over below.
Can I buy a laptop through my business or can I buy a computer for my business? In this guide, we’ll consider where to buy laptops and computers and how to find the best small business laptop (UK). What’s more, we’ll look into the best place to buy a new computer and how to find the best laptop company. Also, we’ll research the process of buying a laptop through 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.
In this guide, let’s look at an independent contractor using company equipment. Later on, we’ll go over what to consider when you search for the best laptop for business (and personal) use. 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.
In this guide, we’ll research buying computers for a small business and how to go about this. As a UK contractor, are you looking into buying the best laptop for small business owner? If you are, you may plan to use this for business purposes at home or work. Indeed, if you’ll use your contractor limited company computer for business use at home, there’s two other things to consider:
Many limited company contractors will more than likely be looking for the best laptop for business use or best office computer. What’s more, some contractors and small business owners may be searching 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 you’re contracting or in business it may be time to buy a new business computer through your limited company. Please read on to discover the benefits when you purchase a new company laptop or PC. What’s more, we’ll consider when you’re buying a laptop computer, how to look for the best computers and company laptops for business owners.
How to buy a computer for business and what to consider
Can you claim for a new business laptop or computer?
As a business owner, can I buy a laptop for my business? 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 about 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 of these costs be regarded as business expenses? The answers here are all yes, providing you use the new business computer or limited company contractor laptop mainly for your business activities, and any personal usage is only minor.
Using personal laptop for work (UK)
If you’re in business and are using your personal laptop computer for work, it stands to reason that you should be able to claim something in respect of this. 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 fair market value of computer equipment, how do we do this? Basically, what you need to do is estimate the fair market value at the date your business started. As a result, you can bring this into your business at that value.
Personal use when you buy a computer or laptop for your company
If you buy a business computer, it could be the case that you use your computer regularly for personal reasons. If this is so, 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’ll need to 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 are buying a laptop for small business
When you buy a new company laptop, you must be using this 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 laptop through limited company
Which activities do you use a computer for?
As a UK contractor limited company, you may use your laptop for business use while on a client site. Basically, you’ll do this to perform your actual contract work. What’s more, you may also use your contractor laptop for other tasks for your business. Therefore, when you purchase a new company laptop or computer, these tasks may include:
- Using any business software applications that your company needs from day to day, or time to time. Depending on your skillset, you may require 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.
Further tasks for your company laptop or PC
Once you have a new company laptop or computer, you may also 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’ve 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 may also advertise your business and market your services online. Furthermore, you can also include updates in any skills, and you can also 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 also need to 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 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‘ll dictate how to treat these for tax purposes.
When you’re buying 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 include online subscriptions and other small or low-cost items. Basically, it’s correct to treat these types of costs as everyday business expenses. In turn, you can deduct these against your company’s profits that’s subject to Corporation Tax (CT).
As a UK contractor, you may ask your accountant can I claim laptop as business expense (UK). You may also ask how is a laptop tax deductible (UK)? Basically, when you look for the best computers or best laptop 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’ll treat the new computer and any associated equipment as `Fixed Assets.’
Depreciation is a term used in accounting. This function is the write-off of part of the value of an asset over a period of time. Therefore, we apply the 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 their value until they’re older or obsolete.
Finally, the depreciation we apply in the accounts isn’t tax-deductible. Instead, a businesses claim `Capital Allowances’ (CA) against the equipment in its Corporation Tax workings. HMRC community forums also contain advice in this area.
Capital Allowances (CA) when buying 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 2022/23. The current AIA is £1 million per annum, deductible against taxable profits subject to CT. However, from 2023/24 there’s now `Full Expensing’ which allows a business to claim the cost of assets that it buys against company profit. This offers 100% first-year relief to companies on qualifying new main rate plant and machinery investments (this will include a computer) from 1 April 2023 until 31 March 2026. To qualify for the new allowance, the equipment should be new and unused and it’s only available for companies. However, if you buy a second-hand computer, you can claim the AIA instead. 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 that 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 also allows you to select the depreciation rate and method used.
VAT implications 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, if you buy certain assets, such as company equipment, it can reclaim the input VAT. Indeed, this is if the total computer or laptop cost (including VAT) is at least £2,000. Therefore, you can claim VAT on laptops for work and also claim VAT on computer equipment. The types of equipment include small business laptop computers, desktop computers, and other electronic devices.
The above doesn’t mean that you need to 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, when you purchase a new computer for your company this can include a printer, a scanner, extra monitors, extra memory, speakers, etc. Therefore, if the combined computer or laptop cost comes to at least £2,000, you can claim the VAT amount.
Let’s assume that 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 amount 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 same equipment personally yourself, it’ll cost you the full £2,200. Hence, we are sure you’ll agree that this is 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. What’s more, it can also 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 the receipts for your 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’ll include both purchases of equipment and every-day 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 that you obtain an electronic receipt.
Other thoughts around how to buy a computer for business
When to buy a new business laptop or computer
If we consider the best time to buy a laptop or computer, the usual annual sales come round in the new year. Nowadays, there’s also Black Friday and Cyber Monday once a year. As a business owner, it’s also key to bear in mind if you purchase a new computer before your company year-end you’ll receive tax relief on the current year’s tax bill, as opposed to a subsequent year’s tax bill.
Where do you start 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? Basically, you could start your search by looking for small business laptop recommendations and view some reviews to get ideas. What’s more, you could look for cheap business laptops for small business and see what comes up. However, if you find the cheapest place to buy laptops, you should do your research on what they have 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 to this, if you search for company laptops with highly efficient processing power and present-day technology will be wise. There’s 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 business is that your new laptop computer has long battery life.
When you search for the best business laptops or best small business desktop computer, the latest operating system commonly used is Windows 11, although Windows 12 is now on the market too. 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.
The technical terms look out for when you buy a computer for business
Within the PC market, when you search for the best desktop computers for business as well as business laptops (UK), there’s various technical specifications to consider as part of a contractor business computer purchase. Therefore, when you’re looking to buy computer or laptop for business use, there’s technical terms to watch out for. As part of your search, you’ll be looking out for the best laptop computer for small business owners and UK contractors. Therefore, as part of your search to a new company laptop or PC, please consider:
- The core processor. Intel core is the leader in the market, and they’ve recently released Intel Core i7 and, subsequently, Intel Core i9. Besides Intel processors, AMD Ryzen is another leader in the core processor market. Fairly 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 also something 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, accelerating the processing required for creating and rendering images, animations, and videos. Overall these deliver better performance and are found more commonly in desktops rather than laptops.
- The number of USB ports may also be a factor depending on how many devices you plan to connect to your new computer.
- A good size RAM. This term stands for Random Access Memory, which is for storing and processing your current data. 16GB RAM gives sufficient memory to run as many programs as you need but without slowing your computer down. This amount of memory is enough for any demanding software and other tasks such as video editing.
Further technical terms look out for when searching for the best computers for small business owners
There are some further considerations when you search for the best computer for business purposes or the best laptop for contractors. Basically, when you search for new PC’s or the best laptops for contractors please also consider:
- A good size hard drive for the long-term storage of various files. SSD is now a common choice as they’re faster than hard drives. They also have more power and are energy efficient in addition to less weight and no noise. Furthermore, they also come in more practical sizes/form factors.
- Please take note, 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 security features in terms of authentication and access control.
- Intel Iris XE are a popular choice for desktops and laptops for small business.
- MacBook Pro, Macbook Air, and Apple iMac are other available options.
- Lenovo Thinkpads are also very popular. A Lenovo Thinkbook is also a good choice.
- There’s also Mini PCs available now, which are a fraction of the size of a standard laptop or PC. Basically, they take up far less space than a regular-sized computer and, in addition, are less costly. Indeed, these are aimed at the gaming market. However, the functions are as quick as most normal laptop computers and desktop PC’s.
In this guide, we’ve looked into how to find the best laptops for small businesses. We’ve also looked at what to consider as the best place to buy laptops (UK). What’s more, we’ve considered the ideal time to buy the best small business laptop computers. Further, we’ve researched what to and look for in terms of technical specifications for the best desktop computers small business and best business computer laptop.
Finally, when you’re 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 paying for it yourself. As a result, your company will receive tax relief.
Link to Contractor Advice UK group on