Investments include major expenses of £250 or more per item that will last for several years. These expenses are intended to increase the operational capacity and efficiency of your company and can range from office equipment to vehicles and software.
Examples of investments
- Office equipment: Computers, printers, scanners and other durable office supplies.
- Vehicles: Purchases of commercial vehicles such as vans, lorries or passenger cars for business use.
- Software: Large software packages or licences that are essential for business operations.
- Machinery and tools: Equipment and tools for production or services.
- Furniture: Office furniture such as desks, chairs and cabinets.
Deductibility of investments
The costs of investments can be deducted as professional expenses, but usually over the lifetime of the item by means of depreciations. Below you can find the most important depreciation periods:
- Small equipment: depreciation over 3 years (33% per year)
- Larger furniture or machinery: depreciation over 5 or 10 years (to 20% or 10% per year); solar panels, for example, can be depreciated over 10 years. A small, inexpensive desk could be depreciated over 5 years.
- Office and buildings: depreciation over 33 years (3% per year)
- Rolling stock, such as a bicycle or a car, is depreciated over 5 years (20% per year). However, if it is a very expensive, high-quality car, for example, this can also be 7 years.
