Sole trader expenses

[Audis5b9]

I purchased a laptop for my wife to use doing work under her sole trader status.

In order to put it through as an expense against her income, do I need to invoice her for it and she pay me back?

Sorry this seems like a very simple question but I cant find an answer online.

[Eric Mc]

Your wife is the sole trader.

In order for HER to be able to legitimately claim this cost, SHE (as the trader - not you) must have incurred the cost "wholly and exclusively for the purpose of the trade". So, not only should she have the invoice, it should be -

addressed to her
paid for by her

So, if it was YOU who bought the item using your own money (or your own credit card), she has not incurred the cost and therefore cannot make a claim. For her to make a legitimate claim for this specific item, she should pay you the money for the item.

The purchase of a computer by a small business would not normally be treated as a normal "business expense". Instead, it would be looked on as the purchase of a Fixed Asset and therefore tax relief would be obtained by claiming the cost through the Capital Allowance system. At the moment, a computer would be eligible for 100% Capital Allowance relief so it effectively has the same effect as writing it off as a straightforward cost.

Hope that helps.