I am a freelance photographer who's
looking to purchase some equipment. What is the best way to go about this, in
terms of tax efficiency? Should I be paying for it through my business account or through my personal
account after paying myself wages? I am new to freelancing and would really
appreciate some advice on this.
Expert’s Answer: In terms of tax efficiency there will be no difference whether you pay for the expenditure through your business or personal account. However, as you have already set up a business account you may want to use this account for your business purchases, such as the photography kit, as it will make your bookkeeping less complex. Remember, you must keep receipts for all purchases. Equipment, such as cameras, is a capital allowance and will reduce your tax liability. Less expensive consumables such as batteries, DVDs or bulbs, will be classed as revenue expenditure and will also reduce your tax liability.
The expert was Alasdair McGill, managing director of Freelance World, a tax and compliance advisor for freelancers.