software/ pc programm how to deal with in accounts?

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in AAT member discussion
hi, can anyone help?
how is software dealt with in the accounts? i know it keeps changing and am unsure if at the moment it is a full expense or if it is a capital expense and has to be depreciated?

we want to do a online shop on a website, quotes for this have been pretty expensive but we have found a programme that lets us do an online shop ourselves for an initial investment of the programme for around £1200.
how would i treat this in the acocunts? if it is depreciated is it 50 % for the first year? or different?
and another question; we wish to purchase it as soon as we can but our year end is 5 april so should we buy it now or wait till after 6 april for next tax year?
thank you so much for any advice/help
xxx

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:software/ pc programm how to deal with in accounts?

    Hi

    You can treat it as a fixed asset and depreciate it over its life, how long that is is up to you. As for how much, it depends on your company policy and if you use straight line or reducing balance method.

    As for waiting til the new financial year, Its up to you. Capital allowances would apply in relation to tax so if you buy before 5th April you'd have your tax reduced by the apprpriate capital allowance this year. If you buy it after the 5th of April the tax allowance will aply to next years accounts/tax.

    Neil
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:software/ pc programm how to deal with in accounts?

    hi Neil

    thanks a lot. you have answered my query brill, was just that i remembered once software was a whole 100% tax expense at one time ( i think) and with the other point wondered if they ahad any new rules in for next tax year that would mean we should wait.

    thanks again
    Karen

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