FAQs - Capital Allowances

1. Can I claim tax relief on equipment essential for my employment?

1. The Inland Revenue’s Help Sheet IR206 (available on their website www.hmrc.gov.uk) explains all about capital allowances for employees.

Briefly, you can claim Capital Allowances on the cost of equipment which you provide to carry out the duties of your employment. Expenditure on 'high-tech' equipment (such as computers) currently qualifies for 100% allowances.

You must exercise caution. If you are a PAYE taxpayer then you must be able to demonstrate that the computer is a necessity. You may consider it is, but this test is notoriously difficulty to pass. If other employees in a similar position manage without a PC then is it really necessary? There are lots of tax cases which support the Revenue. This is the way the Revenue thinks. To be safe you could ensure you make it clear to the taxman in the blank additional information box provided on the SA return the reasons why you need the PC.

If they do not query it within 12 months of the filing date then they will be not be able to argue with that return in the future as long as you have not misled them.