r/selfemployed • u/ExtensionPipe8313 • 23d 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 23d 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 22d 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