Laptop & Computer Equipment — United Kingdom Tax Rules

Claim the cost of laptops, computers, and peripherals via Annual Investment Allowance or direct expense.

Claimable: Fully claimable · Tax authority: HMRC

HMRC Rules

• Laptops and computers qualify for the Annual Investment Allowance (AIA), allowing full deduction in the year of purchase.
• The AIA limit is £1,000,000 for 2024/25, so all typical sole trader equipment purchases qualify.
• If used for both business and personal purposes, claim only the business-use proportion.
• Under cash basis accounting (most sole traders under £150,000 turnover), equipment is expensed directly — no need for separate capital allowance calculations.
• Peripherals like monitors, keyboards, mice, webcams, and printers follow the same rules as the main computer.
• Equipment leased or rented rather than purchased: the rental payments are deductible as revenue expenses each period.

Limits

AIA limit: £1,000,000/year. No practical cap for typical sole trader equipment. For mixed-use items, only the business proportion is deductible.

Worked Example

Lisa buys a £1,200 MacBook Pro used 80% for business and 20% for personal use. She claims £1,200 × 80% = £960 as a capital allowance (or direct expense under cash basis). She also buys a £200 monitor used 100% for work and claims the full £200. Total equipment claim: £1,160.

Record Keeping

• Keep purchase invoices and receipts for all equipment
• Document the business-use percentage for dual-use items with reasoning
• Record the date of purchase for capital allowances timing
• If disposing of or selling equipment, record disposal proceeds
• For leased equipment, keep all lease agreements and payment records

Frequently Asked Questions

Should I use capital allowances or cash basis for my laptop?

If you use cash basis accounting (most sole traders under £150,000 turnover can), simply expense the business-use proportion directly in the year of purchase. Under the accruals basis, you use the Annual Investment Allowance — but both give the same result in year one.

Can I claim a gaming PC if I use it for work?

You can claim the business-use proportion. If a PC is used 50% for gaming/personal activities and 50% for client work, claim 50% of the cost. Keep a record of how you arrived at the split, particularly if HMRC asks.

What about software installed on the computer?

Business software is a separate deductible expense from the hardware. One-off software licences and subscriptions (e.g. Microsoft 365, Adobe Creative Cloud) are claimable as office costs alongside the equipment claim.

Can I claim a replacement computer in the same tax year as the original?

Yes. Each piece of equipment is a separate AIA claim. If you buy a laptop in April 2024 and replace it in March 2025 (both within 2024/25), you can claim the business proportion of both purchases, provided the combined cost stays within the AIA limit (£1,000,000 for 2024/25).