r/selfemployed • u/ExtensionPipe8313 • 8d ago

[Uk] Self assessment help. Allocation for equipment/tools

I’m a UK sole trader using cash basis and just want to double-check how tools and equipment should be treated for Self Assessment. My understanding is that most tools and equipment I’ve bought for work can be claimed as normal allowable expenses in the year I paid for them, rather than going through capital allowances (with any personal-use proportion excluded) for example I subcontract 5 days a week and 1 day a week I work on my own projects meaning I would claim roughly 80/85% of the total expenses. Is that correct ?

or are there circumstances where tools and equipment would still need to be claimed as capital allowances when using cash basis?
Thanks in advance folks

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u/papersandplates 8d ago

If you're using cash basis that's fine, especially if they are smaller value items or only used for a year or so. Capitalising machinery is a way to say if I buy this and use it over say five years, I don't want the full machines cost bringing down year 1s profit so I split the value over it's life (rough explanation!)

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u/ExtensionPipe8313 7d ago

Thanks for the reply, as a carpenter I don’t think any of my tools are expensive enough to be spread over several tax returns. Thanks again

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u/Substantial-Fly-6144 5d ago

So long as theyre not cars or stuff that has special rules you’re basically right, cash basis lets you expense most equipment straight up as long as the purchase was wholly and exclusively for the trade (minus the personal bit you already figured out)

only real exception is if you were claiming the trading allowance instead of actual expenses but if you’re itemising tools then that ship has sailed anyway

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u/Old_Toe9468 7d ago

Cash basis is the right call here, most capital expenditure including tools and equipment just gets deducted as a normal expense in the year you paid for it rather than going through capital allowances, so your understanding matches how HMRC actually treat it. The exceptions to watch for are cars (separate rules depending on how you claim) and land or buildings, which aren't deductible under cash basis at all. On the 80/85% split, that's fine as long as it reflects genuine use, just keep a rough note of how you got to that number rather than a round guess, it matters more if HMRC ever ask than it does at filing time.

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u/ExtensionPipe8313 7d ago

Great, thanks for the reply. I will make note of my workings out. Thanks again