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Sam, Accountant
Category: Tax
Satisfied Customers: 14154
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am a sole trader who is not vat registered and I am looking

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I am a sole trader who is not vat registered and I am looking at purchasing a computing piece of equipment for my business. The finance company explained that for accounting purposes, I can claim back the interest element of the repayments and then when the equipment is payed for, it would sit on my profit and loss account as a tangible asset. I would then get tax relief on the repayments I make every year.

Would the same apply if I was to purchase the equipment through a personal bank loan rather than through the finance company?

Thanks for your question

Yes - it works on the same principal - you get credit for the item, itself through the capital allowance regime (which allows up 100% of the purchase cost through the claim on annual investment allowance) and then again claim the interest element of the loan repayment


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