I am a self employed design consultant. I purchased a laptop I use for work late 2012, and have been depreciating it for the last 2 tax years (2013, 2014). My office was recently broken into and the laptop was stolen. Am I able to still claim depreciation on it (2015), even though it is no longer in my possession? With the insurance payout I have replaced the equipment. Am I able to claim the full amount of the new equipment, or only the difference between payout and replacement cost?
You can only claim wear and tear on assets that you use for business purposes. Therefore, you need to apportion the depreciation and claim up until the date your laptop was stolen. You cannot claim for the period it is not in your possession.
You can claim depreciation on the new computer based on it's replacement cost.
Please use our Wear and Tear Calculator to check that you are using the correct depreciation rates. Also, remember the wear and tear needs to be pro-rated based on personal versus business useage. How to calculate Wear and Tear
Nicsays: 17 August 2015 at 13:44
Thanks for the reply. Very helpful.
Just a couple more questions if you don't mind.
When does an asset purchased for work, like software or hardware, need to be depreciated over a period of time as apposed to written off in 1 go as a business expense?
And as a freelance graphic designer, what Tax code should I use?
Thanks for the help!
TaxTimsays: 17 August 2015 at 15:32
You can write-off "low value" individual assets which cost less than R7,000 in one go. Anything above R7,000 purchase price must be depreciated per the SARS approved Wear and Tear rates I sent earlier.
Business source codes are all at the link below. None really fit "Graphic Design" so probably best to go with 34 "Agencies and other services" Business Source Code Table
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