Replacing Small Electrical Items - Expense or Capital Asset??

Hi,

In the first year of renting out my former home, I had to buy a replacement kettle and toaster.
I am now putting together my first tax return and am just wondering if I can treat this purchase as an expense or are they considered depreciable assets and subject to 12.5% wear and tear over 8 years?

Thanks.

I have a kettle 30 Euro and a hoover 50 Euro this year and I wrote a note for my accountant that I'm not putting anything under 100 Euro in wear and tear. It's fine as far as I'm concerned for cookers, washing machines, furniture etc.

This is a question I had couple of years ago when starting a small business. I did a Start your own Business course and this topic came up and we were told anything under €100 was an expense. I spoke to 2 accountants for advice before starting up and asked this question again, one agreed with the info on the course, one disagreed and said any piece of equipment like that was an asset, I was also talking about small appliances similar to what you mention that would be very unlikely to have an 8 yr lifespan with the sort of use I would be putting them to.

So I decided to go direct to the source and rang Revenue, (I made sure I was talking to someone who knew something with a bit of experience), anyway the answer I got was that yes to be accurate they are assets but in practice items under 100 or so were considered an expense. There seems to be a difference between rules and actual practice so I'm sure Revenue would decide which route suited them if it came to it!

Monbretia said:

There seems to be a difference between rules and actual practice so I'm sure Revenue would decide which route suited them if it came to it!

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Well that's gas Monbretia. I'll continue with my actual practice instead of the rules. It's a nonsense putting a kettle in as capital.

Bronte said:

It's a nonsense putting a kettle in as capital.

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The problem with common sense is that it's not that common.

Well Tommy I buy kettle in 2000 and it's caput in 2002 and buy a new one in 2002 and now go back and claim the remaining 12.5% for the 6 years in one fell swoop of Euro 22.50 and then there's the iron the toaster ......... and my Wear and Tear sheet would have revenue in such a tizzy that I think they'll forgive my claiming the 30 Euro in Year 1. What do your clients do? Currently double checking LPT and it it totally unbelievable the actual dates and how to figure them out depending on how you paid. I'm going back to 2013 even as I think I have paid twice then. But only once in 2014 and going forward - I note revenue have modified the LPT website and have a note about the househhold charge (I'm OK) but they are catching up with people it would seem.

There's no sense in capitalising any ongoing repairs & maintenance item (as opposed to an element of an original larger fitout) under €500 and probably little sense in doing so for amounts tapering above that figure. As regards my customers, I only advise them and the final call is up to them so practice varies, but I don't see any particular difficulty either way.

But you do agree with putting a Washing machine under W&T? You're confusing me. Repairs and maintenance is just a cost.

What are your clients doing with LPT?

Folks,
Thanks for the helpful replies, really appreciated.

While I can see the logic in putting the cost of replacing small items (that you wouldn't expect to last 8 years) down as an expense, is claiming for larger items up to €500 (Fridge Freezer / Dishwasher etc.) not pushing your luck a bit!

Bronte said:

But you do agree with putting a Washing machine under W&T? You're confusing me. Repairs and maintenance is just a cost.

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I thought we were talking about kettles and irons? It depends totally on the circumstances.

Bronte said:

What are your clients doing with LPT?

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As in claiming as a deduction? Some claim it, some don't. It's up to the customer. My own views on this are well known.

I expense repairs & replacements. Having a kettle, toaster, washing machine, Hoover as capital is mad. None of these things will last 8 years in rented accomodation. And I'm not faffing about working out how much depreciation I've claimed on a Hoover over two years & how much I now need to write off.
The paperwork is painful enough!

Why get involved in responsibility for such small items ?
I supply a vacuum and nothing else apart from the normal fixed white gods, keeps renting simple. Many people like their own style of kettle, toaster etc anyway.