Para 15.2 just states a single purchase and nothing about relationship
Para 15.3 suggests normal VAT for single supply applies (i will have to check this), however, their second example of kitchen supplies, a pizza over, fridge and dishwasher counts. They are completely separate but of course all used for the business. My example is at least equal to this as all are certainly used for the business as well. The dishwasher is not being used to wash items in the kitchen oven, most likely plates. i.e all three items in their example are just for the business.
Have I missed a clause or not interpreted 'package' correctly? Please let me know where it states that the iphone's main function would have to be working with the computer to claim?
OK, understood. As a computer programmer developing iPhone software with those specifics which I told in person to the HMRC inspector at the time of the inspection he actually said it was OK. It was in the follow up assessment that they/he said it was not allowed, so perhaps forgot the nature of my work. Although even then they could argue a phone is always for making phone calls, however, in the case of an iPhone developer there is an exception. However, I am not sure it is worth challenging HMRC and losing more time off work!
All that being said if a chef bought a mobile phone in their package along with the other items, as the chef spends all day in the kitchen and you have to assume the phone is only used for business purposes then the phone in the case of the chef would also be used in the kitchen all day. Likewise I use the phone all day in business hours with the laptop. Also is it not the fact that the shop sells both items shows a close relationship, computer store vs a kitchen store both selling related products.
If HMRC are right here, then one of the biggest accountancy firms in London are advising their clients incorrectly, so they have also interpreted this wrongly. So one last check are you sure HMRC are in the right here based on their guidelines?
I thought your example would be fine as well!
However, if that is not then I understand that mine is not either.
I will discuss with the accoutant who advised me, saw the receipt and did the VAT return. It is possible they did not look at the individual items at the time, although, their website only talks about single receipt over £2000 being the criteria and nothing about the relationship of the capital items. However, will accept your answer! Thanks
Just a follow up question, you said "it is implied under normal VAT rules that items of expenditure would be integrated." What do you mean by this. Why do items need to be integrated?
I bring this up again as I spoke with two advisers today who agree with my view, but I want to understand your position further?
Michael, thank you for your reply.As I explained in my previous posting, if HMRC Inspector indicated to you that the expenditiure was claimable (iphone would be deemed capital), then you should follow it up with HMRC and appeal against assessment.In my experience, I would not view purchase of iphone as capital as these things are replaced within two years (on mobile phone contracts). The term integrated is a loose term. The example of items used in a kitchen is a good example of expenditure being integrated.Other advisors may have other interpretation.I hope this is helpful.