Buying a round... What to do

I'm thinking of buying a new round.. Would it go through the books as a asset or expense? 

I know it would be more financially beneficial if it went through as a expense however I want do things correctly and could really do with some advice as I'm looking to buy a round soon. 

Cheers

Can’t do either, as you are only purchasing ‘good will’ 

You can treat it as capital gain for tax purposes.

Dave B said:

You can treat it as capital gain for tax purposes.

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No sure what you mean by that. 
when you buy a round you pay out the money, but nothing goes against your tax. We have bought two rounds in the past had two accountants as one retired. Both said you are buying goodwill but that’s it. The good thing for us we could leave our jobs sooner by buying a round so to us it was worth it. Nothing went against tax. It is classed as an asset but that’s as far as it goes. It doesn’t depreciate against your tax etc

If you sell a round the profits come under capital gains which the tax free threshold is 12600 quid this year.

Surely if you pay tax to sell a round you claim tax to buy one.

Dave B said:

If you sell a round the profits come under capital gains which the tax free threshold is 12600 quid this year.

Surely if you pay tax to sell a round you claim tax to buy one.

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Unfortunately not, you only get taxed when you sell it. I even think if you sell it at a loss you'll get taxed on the sale value. It's only classed as an asset when you sell it.

You should be able to treat it as an expense as it is solely and exclusively for business.

regardless of being goodwill or otherwise it is still an asset but an intangible asset.

therefore you should be able to depreciate it as amortisation which is depreciation but for non tangible stuff.

I would always check with a accountant to be 100 as the method of sale and other details may have a significant bearing on its consideration by hmrc. 

Apparently the rules changed last year, however the way I read this is you can only claim if you are a Limited Company or buying a Patent. Still speak to an Accountant though.

https://www.gov.uk/guidance/corporation-tax-relief-on-goodwill-and-relevant-assets#relief-you-can-get

https://www.gov.uk/intellectual-property-an-overview

Surely if you buy a few tools off the same guy you can say you are buying a business and then not worry about the goodwill side of things as then it is a business you are buying.

Omega said:

You should be able to treat it as an expense as it is solely and exclusively for business.

regardless of being goodwill or otherwise it is still an asset but an intangible asset.

therefore you should be able to depreciate it as amortisation which is depreciation but for non tangible stuff.

I would always check with a accountant to be 100 as the method of sale and other details may have a significant bearing on its consideration by hmrc. 

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Unless it’s changed recently. You cannot claim it as an expense. We had our reciept etc for it everything legit. We went to the tax office ourselves to query it. Our accountant also said definitely not. 
 

Dave B said:

Surely if you buy a few tools off the same guy you can say you are buying a business and then not worry about the goodwill side of things as then it is a business you are buying.

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Doesn’t work that way. 
If he asks his accountant that’s the best thing or even HMRC. 

My accountant informed me buying around, cannot be claimed as a expense  !  

Just get a receipt of the guy and put it through your books , simple.