Query re. Trados as a tax-deductible item in the UK Thread poster: Joanna Fox
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Joanna Fox 
United Kingdom
Local time: 13:38
German to English
+ ...
Hi there,
I am in the throes of starting up as a freelance translator and am planning to buy my own Trados license. I just wanted to see whether anyone has any experience of claiming back a Trados purchase on tax and how this works? I am fairly new to all of this, and have just signed up for a HMRC course which should hopefully make things a little clearer, but it would be good to get some advice/reassurance from anyone with more experience.
Many thanks in advance.
| | | | Tom in London
United Kingdom
Local time: 13:38
Member (2008)
Italian to English
Hi Joanna
Yes, of course you should write it down as a deductible business expense, since your only reason for purchasing it is to assist in your work as a translator.
HOWEVER:
Under current rules (which tend to change every year) computer software is one of the items that are considered not as business expenses but as capital assets whose cost cannot be completely deducted in the one tax year but must be added to your assets pool and then partly deducted a... See more Hi Joanna
Yes, of course you should write it down as a deductible business expense, since your only reason for purchasing it is to assist in your work as a translator.
HOWEVER:
Under current rules (which tend to change every year) computer software is one of the items that are considered not as business expenses but as capital assets whose cost cannot be completely deducted in the one tax year but must be added to your assets pool and then partly deducted along with everything else in your pool.
But year on year, what can be deducted and how tends to vary. Perhaps you should clarify this by consulting an accountant. If you happen to be in London I can recommend an excellent one. If so, msg me privately.
[Edited at 2011-09-22 11:15 GMT] ▲ Collapse
| | | | Joanna Fox
United Kingdom
Local time: 13:38
German to English
+ ...
TOPIC STARTER
Many thanks for your reply, Tom, it is very helpful.
Unfortunately I am not based in London, but I have an accountant friend who should be able to help.
Best wishes,
Joanna
| | | | | No pools since 2008 | Sep 22, 2011 |
Tom is right in his background info about computers/software being a capital asset.
(Cue humourous remarks re: whether Trados is an asset or a liability, guffaw, guffaw!)
However, in financial 2008-09, the Annual Investment Allowance was introduced, making life simpler, and you can currently whack up to £100,000 in there in one year. If you spend more than 100,000, then you need the pool arrangement Tom described.
(Cue more hilarity re: how long it will be... See more Tom is right in his background info about computers/software being a capital asset.
(Cue humourous remarks re: whether Trados is an asset or a liability, guffaw, guffaw!)
However, in financial 2008-09, the Annual Investment Allowance was introduced, making life simpler, and you can currently whack up to £100,000 in there in one year. If you spend more than 100,000, then you need the pool arrangement Tom described.
(Cue more hilarity re: how long it will be before a Trado licence needs its own asset pool)
HMRC guidance on AIA tends to refer to plant and machinery and suchlike, but, as Tom says, software (typically) is too. See also e.g. uk business forum. Please note this is not a recommendation or formal advice, I am not an accountant.
However, as a translator, can I recommend that you, as a newcomer, take some time to consider whether Trados, given its price) specifically serves your purposes, insofar as you know what those purposes are. ▲ Collapse
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Tom in London
United Kingdom
Local time: 13:38
Member (2008)
Italian to English
Charlie Bavington wrote:
..... in financial 2008-09, the Annual Investment Allowance was introduced, making life simpler, and you can currently whack up to £100,000 in there in one year. If you spend more than 100,000, then you need the pool arrangement Tom described.
Yes - I forgot to mention that BUT you still have to record these expenses separately, as capital assets, in a pool. You can't just enter them as ordinary administration expenses. Then, as Charlie says, if you spend less than 100K in that year you can deduct the whole pool (under current rules)
I am not an accountant either, though.
As to whether Trados is an asset or a liability, I don't know. I've never attempted to use it
And now for a joke.
Q. How do you get a bunch of Canadians out of a pool?
A. You say "Hey ! You Canadians ! Get out of the pool ! "
[Edited at 2011-09-22 12:55 GMT]
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