First of all, I feel the need to show off a bit about the fact that I submitted by tax return for 2011-2 online even before I'd recieved notification that I needed to do it! On the other hand this was motivated entirely by knowing I would be due a refund... am very impressed that I received the refund direct into bank account just over a week later. I do like technology sometimes...

Anyway the main question: up to now my expenses for teaching have been revenue expenses, but this year I will have two major capital expenses: piano (which I was hiring before and have now bought) and macbook which I'm going to spend quite a chunk on next week.

Mostly I understand the capital allowance rules, I'll be claiming the whole lot in one year under the AIA rule. But... both these items are sometimes used for personal stuff as well as work, so I'm not sure whether I should be claiming a proportion only and if so how I work it out.

The piano I'm inclined to claim the whole lot because I do play for pleasure as well, I don't think I would have ever purchased a piano if I wasn't teaching. The laptop is different becuase I would have owned one anyway, might have upgraded to a mac anyway, and use it a lot for personal stuff.

Can any of you tell me how you work out the proportion of personal use for these things? Or do you not bother? Seems difficult to quantify.

Thanks

Hello

With instruments there's always the "duality of purpose" issue however I go with my wonderful accountant's advice - claim the lot because you couldn't actually DO the job without them!

With my pooter I claim a percentage - again I listened to my accountant - be realistic, don't take the mickey and all will be well.

Hope that helps. No doubt loads of conflicting advice will follow!

Tax-Bag x

With the proportion bit, I was told (at an HMRC self-empl workshop) to keep a record (eg for a month) of how many hours you use it for work and for personal use and then work it out time-wise. So if half the time you spend on the computer is personal and half work, you take half the cost as capital allowance. It may be that a couple of weeks of recording would do. It'll be a bit of a faff but if you get checked up on, it should keep the tax man happy

A word of warning for violinists with instruments over the ?6000 threshold for Capital Gains Tax: if you claim the cost of the instrument as a capital allowance, an increase in value is liable for CGT. (IANA accountant etc etc)

You would be mad to sell your strad.

Assuming you don't realise any other gains in the same tax year the CGT allowance is ?10,600.
So say you bought a violin for ?7,000 and managed to sell it for ?18,600.
?18,600 - ?7,000 = ?11,600
?11,600 - ?10,600 = ?1,000
So ?1,000 to be taxed at your marginal rate (presumably basic or higher)

(IANAA etc, slightly different rules if a company owns the instrument)

But could you not rent the expensive violin to the business, thus still having a deductible expenses. If you knew this violin will increase in value over time, and it was purchased between TWO partners, say hubbie and wife as an investment therefore any future proceeds from any gains from a future sale would have to be split 50:50 therefore the any chargeable gains arising would probably fall below each individual CGT threshold..

It's just a thought.

:-)

If the husband was renting the violin to the wife, he would have to declare the rent as income in his tax return.

Not if you're a sole trader - you can't rent it to yourself!

Can I politely suggest a separate thread for the violin discussion? Am still hoping to get some more replies re. items used partly for personal use (thanks to those who replied to that already).

I think Bagpuss's answer earlier is about as good as its going to get.

Agreed, it's not so much about being right (although that is always the goal), it's about being able to justify what you put if you are audited. If someone pitched up at your house and said how exactly did you decide that your computer is 60% business and 40% personal, how clearly could you explain your conclusion? It's all about making an effective case, so telling them you logged the hours over a "typical" period is a good answer. "I sort of made it up" is a bad answer. It's up to you how you come to your conclusions, but whatever you decide has to be something you could convince a sceptical third party about. It doesn't necessarily have to be about hours, it can be about value, if a ?200 computer could have met your personal needs but you needed a ?600 computer to operate your business then ?400 of that is a business expense. But it has to be something you feel you can demonstrate has been clearly thought out. Nobody is going to be 100% correct.