For the tax experts - depreciating a Laptops

[kiwigeo]

Im totally confused....I purchased a laptop computer via salary sacrifice and I wish to claim depreciation on the item. Ive asked a half a dozen people (many are accountants) about this and received half a dozen very different answers.....some say I cant claim any depreciation, others say I can claim the full cost of the laptop while others say I can only claim some of the cost. Cant find alot if info on the ATO website that relates specifically to my situation..

The facts:

1. Laptop was purchased by me and my name is on tax invoice.
2. My employer then reimbursed me for amount paid for the machine.
3 laptop is 100% used for work.

Any comments would be appreciated.

Thanks Martin

[zymurgy]

Martin,

Ring the ATO and ask them.

I would think that since the Notebook was actually paid by employer, it would not be claimable.

On the other hand, invoice is in your name, but you would also need to show income from employer (payment for notebook) - would cancel each other.

[ndru]

What Gordon said.

IIRC, the general FBT rule is that expenses subject to FBT are tax deductible by the employer, not the employee.

The new income tax rates will make this sort of thing a bit less attractive for those in the $70K-$120K range next year.

[kiwigeo]

What Gordon said.

IIRC, the general FBT rule is that expenses subject to FBT are tax deductible by the employer, not the employee.

Hi Gordon,

Laptops are one of a list of items exempt from FBT. Youre allowed to salary sacrifice towards one laptop per employee per year. Laptop doesnt have to be for work use...unless as in my case youre going to claim depreciation.

[Shaty40]

My understanding is hardware can be depreciated over a 5 year period, software is 100% deductable in the first year.

Tim:)

[adrian]

Since your employer ultimately paid for the laptop and it's in your name wouldn't it attract fringe benefits tax? If so then you should be careful that your employer isn't claiming it as a cost of business and then you go and claim it as a business expense also. Claiming depreciation for something you didn't pay for is not something I'd be asking the ATO about.

[ndru]

My understanding is hardware can be depreciated over a 5 year period, software is 100% deductable in the first year.

According to the public ruling TR 2000/18, the Commissioner's useful life for computers is 4 years. I think software has to be amortised over a 2.5 year period, using the diminshing value method. Anything under $300 can be written off in the same year unless it forms part of a larger system (eg hard disk integral to the functioning of a computer, an external hard disk may not be deemed as integral).

Just to add to my earlier post, I have looked at a few corporate salary sacrifice documents and none of them were clear about the deductibility of the laptop's depreciation. Some say that depreciation may be deductible, others say that it is not :confused:.

The ability for an employer to deduct an expense that the employee can or vice versa just doesn't appear consistent with the "otherwise deductible" FBT principle. I'll be happy to be corrected, though. If its true then I'll go and buy a laptop tomorrow!

[Sturdee]

The fundamental issue for claiming depreciation is to establish to the ATO's satisfaction ( read a nearly impossible smilie here) that it is used to earn assessable income.

In your case, as an employee, you would have to prove that your employment is dependant on you having your own laptop. Similar to tradesmen who have to supply their own tools to get a job. As you have been working for them already you would have a hard time proving this. You would need to prove that your employer would, and legally could, sack you for not providing your own computer and treat all other employees in the same manner.

However if you succeed than hardware can be claimed over 3 years and software in the year of purchase.


Peter.

[ndru]

You would need to prove that your employer would, and legally could, sack you for not providing your own computer and treat all other employees in the same manner.

The ATO probably could get the Administrative Appeals Tribunal to disallow such a deduction if you could not prove the nexus between employment and the use of the laptop.

In normal practice I doubt that ATO rely on this approach much. I have been audited on my deduction of professional membership expenses (professional development training). The membership wasn't a contractual condition of my employment but the ATO ended up allowing. I think they permitted it because there was no other reason why I would undertake such a membership unless I applied the knowledge in my work.

I believe they look for a "reasonable" connection between the expense and the income earned. They will, however, look for any opportunity to apportion costs between production of income and other activities (eg buying a computer to do work at home and entertainment).

[kiwigeo]

Since your employer ultimately paid for the laptop and it's in your name wouldn't it attract fringe benefits tax? If so then you should be careful that your employer isn't claiming it as a cost of business and then you go and claim it as a business expense also. Claiming depreciation for something you didn't pay for is not something I'd be asking the ATO about.

No no....I salary sacrificed to pay for the thing....its all quite legal. It works as follows.

1. I buy the laptop and get a tax invoice made out to me.
2. I present tax invoice to my employer and they reimburse me and deduct same from pre tax salary.
3. I claim depreciation on cost of laptop because its used 100% for work. THIS is the part that is in question.

Note that employer can claim GST portion of cost of laptop.

Cheers Martin

[kiwigeo]

The fundamental issue for claiming depreciation is to establish to the ATO's satisfaction ( read a nearly impossible smilie here) that it is used to earn assessable income.

In your case, as an employee, you would have to prove that your employment is dependant on you having your own laptop. Similar to tradesmen who have to supply their own tools to get a job. As you have been working for them already you would have a hard time proving this. You would need to prove that your employer would, and legally could, sack you for not providing your own computer and treat all other employees in the same manner.

However if you succeed than hardware can be claimed over 3 years and software in the year of purchase.



Have been claiming depreciation on laptops since I started in my job 16 years ago. Previous machines were paid for with post tax dollars. This is the first time Ive paid for a machine via salary sacrificing.

Would have no problems proving my employment is dependant on me having my own laptop. I work as a field based geologist working on oil rigs. Clients require me to have a laptop for daily reporting, log interp and report preparation...no laptop no job.

[ndru]

Martin

I still think that the relevant fact is that your employer has reimbursed you for the purchase, not whether you are using it for work. Have a look at this ATO website page (http://www.ato.gov.au/individuals/content.asp?doc=/content/16077.htm&pc=001/002/013/005/004&mnu=45&mfp=001&st=&cy=1) at the second bullet point under "Basic Rules". I think that the only part you might be able to make a deduction on is any portion of the purchase price that your employer doesn't reimburse you for.

As Gordon suggested, ring the ATO to answer your question anyway. If you are hiring a tax advisor on this matter then get them to put their advice in writing.

[kiwigeo]

Just to add to my earlier post, I have looked at a few corporate salary sacrifice documents and none of them were clear about the deductibility of the laptop's depreciation. Some say that depreciation may be deductible, others say that it is not :confused:. It doesn't seem consistent with the "otherwise deductible" FBT principle. I'll be happy to be corrected, though. If its true then I'll go and buy a laptop tomorrow!

Ive combed through the ATO (including relevant TR's) and can find nothing that refers specifically to depreciating laptops that have been bought via a salary sacrificing arrangment with ones employer. It seems to me that I (or preferably someone else) needs to apply for an ATO ruling on this.

For a rundown on salary sacrificing laptops see April edition of Personal Investment Magazine (pg 23). The article basically states the following:

1. When an employer packages a laptop in lieu of salary the employer is exempt from paying FBT on same.
2. The FBT concession is available regardless of how the laptop is to be used (eg. you can buy it for your kids).
3. the FBT concession applies to one laptop per year per employee.
4. Employer can claim back GST component of purchase price.
5. It doesnt matter whether employer purchases laptop on employees behalf or employye buys computer and then gets remibursed. Whats important is that a salary sacrificing agreement is in place between the two parties.
6. If laptop is used for business purposes cost of same can be depreciated over 3 year period. Documentation (eg diary) will be required by ATO to verify computers business use.

Of course the ATO has the final word on the matter (and just about everything else) and its view is probably the opposite to that of PI magazine. All very confusing.

Next step I guess will be a letter to ATO

[kiwigeo]

Martin

I still think that the relevant fact is that your employer has reimbursed you for the purchase, not whether you are using it for work. Have a look at this ATO website page (http://www.ato.gov.au/individuals/content.asp?doc=/content/16077.htm&pc=001/002/013/005/004&mnu=45&mfp=001&st=&cy=1) at the second bullet point under "Basic Rules". I think that the only part you might be able to make a deduction on is any portion of the purchase price that your employer doesn't reimburse you for.

As Gordon suggested, ring the ATO to answer your question anyway. If you are hiring a tax advisor on this matter then get them to put their advice in writing.


The interpretation above is one I received from one accountant but I have also received competely different interpretations from other accountants....I dont know who to believe. Will get onto the ATO as suggested...and end up even more confused. Will post with more info as it comes to hand.

Thanks for the input/assistance.

[kiwigeo]

Have a look at this ATO website page (http://www.ato.gov.au/individuals/content.asp?doc=/content/16077.htm&pc=001/002/013/005/004&mnu=45&mfp=001&st=&cy=1) at the second bullet point under "Basic Rules". I think that the only part you might be able to make a deduction on is any portion of the purchase price that your employer doesn't reimburse you for.



This rule only applies if Employer bears the cost of the laptop. If Im salary sacrificing this is not the case...its my pre tax dollars Im spending.

[ndru]

Martin

I stand corrected!

http://law.ato.gov.au/atolaw/view.htm?find=%222004%2F559%22&docid=AID/AID2004559/00001

If you're in the higher marginal tax bracket its almost a free laptop over 3 years, although the Government's new tax brackets will reduce the scheme's to those in the 65K to 125K group.

[kiwigeo]

Martin

I stand corrected!

http://law.ato.gov.au/atolaw/view.htm?find=%222004%2F559%22&docid=AID/AID2004559/00001

If you're in the higher marginal tax bracket its almost a free laptop over 3 years, although the Government's new tax brackets will reduce the scheme's to those in the 65K to 125K group.

Much cheaper than buying a laptop with post tax dollars. And IF (big IF!) one can depreciate the machine for business use then even more savings.

[ndru]

Much cheaper than buying a laptop with post tax dollars. And IF (big IF!) one can depreciate the machine for business use then even more savings.

And if you're on 48.5% marginal tax (incl Medicare) then you almost get it for free after three years. I'm thumbing through the Dell catalogue right now!

I wonder what happens if you're paying child support - does it get adjusted and for your sacrifice? If so, the Government would effectively be paying you for a new laptop!

[kiwigeo]

And if you're on 48.5% marginal tax (incl Medicare) then you almost get it for free after three years. I'm thumbing through the Dell catalogue right now!

I wonder what happens if you're paying child support - does it get adjusted and for your sacrifice? If so, the Government would effectively be paying you for a new laptop!

Child support is calculated on PRE tax earnings isnt it? Salary sacrificing wouldnt really help a person in that situation.

[ozwinner]

( read a nearly impossible smilie here)

Peter.
Here ya go Peter. http://instagiber.net/smiliesdotcom/ups/mtk/eatme.gif

Al :)

[Sturdee]

Nineteen times the same post, you must be certain of that fact. :D

Peter.

[ozwinner]

Child support is calculated on PRE tax earnings isnt it? Salary sacrificing wouldnt really help a person in that situation.
X19
A new world record........
Well done.

Al :D

[ozwinner]

Beat me by the skin on me teeth Peter.


Al :D

[Wayne Davy]

Ok, I am not a Tax Expert BUT I have salary sacrificed a couple of Laptops as well as two PDA's (Organisers - Pocket PC/Palm/etc.). Now, it is Ok to depreciate the laptop/pda if it is used for work. This has been verified by four separate Accountants used by guys I work with.

The amount that can be depreciated depends on the work usage - in yours case (and mine) its 100% of the cost. Now this is the interesting bit, the cost. Most would think it your out-of-pocket cost (ie after the tax saving). Which, on a $3000 laptop where you are on the top marginal tax rate (inc Medicare), would be $1,272!

Well, nope, it's actually on the Invoice cost (less GST), so the Depreciable Value for the above is $2,272. You can depeciate it over 3yrs so the bottom line is you are actually PAID $50 by the ATO to own the laptop after 3 years!!

SIMPLE Calculation samples:
<TABLE style="TABLE-LAYOUT: fixed; 604pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width=805 border=0 x:str><TBODY><TR style=" 12.75pt" height=17><TD class=xl25 style=" 243pt; 12.75pt" width=324 height=17>Salary Sacrifice + Depreciation</TD><TD class=xl24 style=" 54pt" width=72></TD><TD style=" 58pt" width=77></TD><TD style=" 57pt" width=76></TD><TD style=" 48pt" width=64></TD><TD style=" 48pt" width=64></TD><TD style=" 48pt" width=64></TD><TD style=" 48pt" width=64></TD></TR><TR style=" 12.75pt" height=17><TD style=" 12.75pt" height=17>Marginal Tax Rate</TD><TD class=xl26 align=right x:num="0.48499999999999999">48.5%</TD><TD class=xl26 align=right x:num="0.435">43.5%</TD><TD class=xl26 align=right x:num="0.315">31.5%</TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 12.75pt" height=17><TD style=" 12.75pt" height=17></TD><TD class=xl24></TD><TD style="mso-ignore: colspan" colSpan=6></TD></TR><TR style=" 12.75pt" height=17><TD style=" 12.75pt" height=17>Laptop Cost</TD><TD class=xl27 x:num="3000">$3,000 </TD><TD class=xl27 x:num="3000">$3,000 </TD><TD class=xl27 x:num="3000">$3,000 </TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 12.75pt" height=17><TD style=" 12.75pt" height=17>Less GST</TD><TD class=xl27 x:num="272.72727272727275" x:fmla="=B4*(1/11)">$273 </TD><TD class=xl27 x:num="272.72727272727275" x:fmla="=C4*(1/11)">$273 </TD><TD class=xl27 x:num="272.72727272727275" x:fmla="=D4*(1/11)">$273 </TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 12.75pt" height=17><TD style=" 12.75pt" height=17>Depreciable Value</TD><TD class=xl27 x:num="2727.272727272727" x:fmla="=B4-B5">$2,727 </TD><TD class=xl27 x:num="2727.272727272727" x:fmla="=C4-C5">$2,727 </TD><TD class=xl27 x:num="2727.272727272727" x:fmla="=D4-D5">$2,727 </TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 12.75pt" height=17><TD style=" 12.75pt" height=17>Less Tax Saving based on Marginal Rate</TD><TD class=xl27 x:num="1455" x:fmla="=B4*B2">$1,455 </TD><TD class=xl27 x:num="1305" x:fmla="=C4*C2">$1,305 </TD><TD class=xl27 x:num="945" x:fmla="=D4*D2">$945 </TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 12.75pt" height=17><TD class=xl28 style=" 12.75pt" height=17>Effective Cost</TD><TD class=xl29 x:num="1272.272727272727" x:fmla="=B6-B7">$1,272 </TD><TD class=xl29 x:num="1422.272727272727" x:fmla="=C6-C7">$1,422 </TD><TD class=xl29 x:num="1782.272727272727" x:fmla="=D6-D7">$1,782 </TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 12.75pt" height=17><TD style=" 12.75pt" height=17></TD><TD class=xl27 style="mso-ignore: colspan" colSpan=3></TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 10.5pt; mso-height-source: userset" height=14><TD style=" 10.5pt" height=14>Yr 1 Depreciation @ 33.3%</TD><TD class=xl27 x:num="440.46818181818179" x:fmla="=B$6*0.333*B$2">$440 </TD><TD class=xl27 x:num="395.05909090909091" x:fmla="=C$6*0.333*C$2">$395</TD><TD class=xl27 x:num="286.07727272727271" x:fmla="=D$6*0.333*D$2">$286 </TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 12.75pt; mso-height-source: userset" height=17><TD class=xl28 style=" 12.75pt" height=17>Effective Cost after Year 1</TD><TD class=xl30 x:num="831.80454545454518" x:fmla="=B8-B10">$832 </TD><TD class=xl30 x:num="1027.2136363636362" x:fmla="=C8-C10">$1,027</TD><TD class=xl30 x:num="1496.1954545454544" x:fmla="=D8-D10">$1,496 </TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 12.75pt; mso-height-source: userset" height=17><TD style=" 12.75pt" height=17></TD><TD class=xl27 style="mso-ignore: colspan" colSpan=3></TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 12.75pt" height=17><TD style=" 12.75pt" height=17>Yr 2 Depreciation @ 33.3%</TD><TD class=xl27 x:num="440.46818181818179" x:fmla="=B$6*0.333*B$2">$440 </TD><TD class=xl27 x:num="395.05909090909091" x:fmla="=C$6*0.333*C$2">$395 </TD><TD class=xl27 x:num="286.07727272727271" x:fmla="=D$6*0.333*D$2">$286 </TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 12.75pt" height=17><TD style=" 12.75pt" height=17>Effective Cost after Year 2</TD><TD class=xl30 x:num="391.33636363636339" x:fmla="=B$11-B13">$391 </TD><TD class=xl30 x:num="632.15454545454531" x:fmla="=C$11-C13">$632 </TD><TD class=xl30 x:num="1210.1181818181817" x:fmla="=D$11-D13">$1,210 </TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 12.75pt" height=17><TD style=" 12.75pt" height=17></TD><TD class=xl27 style="mso-ignore: colspan" colSpan=3></TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 12.75pt" height=17><TD style=" 12.75pt" height=17>Yr 3 Depreciation @ 33.3%</TD><TD class=xl27 x:num="440.46818181818179" x:fmla="=(B$6)*0.333*B$2">$440 </TD><TD class=xl27 x:num="395.05909090909091" x:fmla="=(C$6)*0.333*C$2">$395 </TD><TD class=xl27 x:num="286.07727272727271" x:fmla="=(D$6)*0.333*D$2">$286 </TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 13.5pt" height=18><TD style=" 13.5pt" height=18>Effective Cost after Year 3</TD><TD class=xl31 x:num="-49.131818181818403" x:fmla="=B$14-B16">-$49 </TD><TD class=xl32 x:num="237.0954545454544" x:fmla="=C$14-C16">$237 </TD><TD class=xl32 x:num="924.04090909090905" x:fmla="=D$14-D16">$924 </TD><TD style="mso-ignore: colspan" colSpan=4></TD></TR><TR style=" 13.5pt" height=18><TD style=" 13.5pt" height=18></TD><TD class=xl24></TD><TD style="mso-ignore: colspan" colSpan=6></TD></TR><TR style=" 12.75pt" height=17><TD style=" 12.75pt; mso-ignore: colspan" colSpan=8 height=17>NOTE: I am not a Tax Expert and you should consult your Accountant to verify the above figures given your personal circumstances.</TD></TR><TR style=" 12.75pt" height=17><TD style=" 12.75pt" height=17>

</TD><TD class=xl33></TD></TR></TBODY></TABLE>

Another little point, salary sacrifice comes under the FTB rulings and the FTB Year runs from 1st April to 30 March NOT the Tax year.

Another sample from the Net
http://www.laptopshop.com.au/Website/Product.asp?ProdID=1142&CategoryID=996

[kiwigeo]

Hi Wayne...thanks for the info.

Yes I am aware that the FBT year isnt same as tax year. You sort of expect this sort of thing with the screwed up tax system in this country.

Am currently cursing the day my accountant talked me into running a self managed super fund. Im basically an unpaid employee of the ATO for at least 8 days of the month.

[Wayne Davy]

I'm thumbing through the Dell catalogue right now!
Mate,

If you are after a desktop replacement laptop - check out the HP ZD8000 range. The ZD8004 model is going for around the $3000 mark including bonus external Digital TV Tuner. Now these are HUGE and have 17" Ultra Bright screens with full P4 3.2G processors so they are Heavy and battery life is not great (1.5 hours max). However, they are very, very powerful laptops (term used lightly) and the screen is mind blowing. I Salary Sacrificed one last month and love it.

Basic spec is:
HP Pavilion zd8004AP
Microsoft® Windows® XP Professional
Intel® Pentium® 4 Processor 640 (#) with Hyper-Threading Technology (3.2GHz, 2MB L2 cache, 800MHz FSB)
17.0" colour TFT WXGA+ (1440 x 900) wide viewing angle, BrightView 16:10 Widescreen
512MB (2 x 256MB) DDR2 SDRAM (400MHz)
80GB (5400 rpm)
Dual Layer DVD±RW/±R
ATI Mobility Radeon X600 PCI-Express X16 Graphics (128MB DDR SDRAM)
Wifi B/G
Memory Card Reader
FULL size Keyboard (includes Keypad!!!)
Plus more

Check out the full specs here:
http://h50025.www5.hp.com/hpcom/au_en/11_29_63_3708_PV299PA.html

Gloat piccy (Coke can is for scale and the camera flash spoiled the look of the screen):

http://members.optusnet.com.au/woodibuildit62/images/100_3451.jpg

[Wayne Davy]

Kiwi,

No worries just check with your accountant (one of the ones that outlined the same scenario I guess).

My accountant did not believe this either at first but I insisted she check it out. She did with a Senior Accountant at the firm and they verified it.

[ozwinner]

Am currently cursing the day my accountant talked me into running a self managed super fund. Im basically an unpaid employee of the ATO for at least 8 days of the month.
Why is that??
Fill us in.

Al :confused:

[Jack E]

If you are after a desktop replacement laptop - check out the HP ZD8000 range. The ZD8004 model is going for around the $3000 mark including bonus external Digital TV Tuner.

Nice computer Wayne.
Is it hard to justify the 100% work usage with an external Digital TV Tuner in the package? :D :D :D

Cheers, Jack.

[kiwigeo]

Why is that??
Fill us in.

Al :confused:

Al, its called "tax complicance"....in layman's terms it means spending hours on tax related paperwork. The tax regulations are complex and convoluted and the bottom line is as a trustee of a SMSF youre required to know the regulations and ensure that your fund is compying with same. Most SMSF trustees have an accountant handling the administration of the fund but if the accountant's knowledge of the regulations has a few gaps then you as a trustee end up taking the rap if the ATO decides to do an audit.

On the positive side Im doing alot better than most managed super funds but it comes at a cost...alot of time spent making sure my fund is compliant with ATO regulations. The SMSF has been running for 2 years now and the jury is still out as to whether or not taking the SMSF path was a good decision.

[kiwigeo]

Mate,

If you are after a desktop replacement laptop - check out the HP ZD8000 range. The ZD8004 model is going for around the $3000 mark including bonus external Digital TV Tuner. Now these are HUGE and have 17" Ultra Bright screens with full P4 3.2G processors so they are Heavy and battery life is not great (1.5 hours max). However, they are very, very powerful laptops (term used lightly) and the screen is mind blowing. I Salary Sacrificed one last month and love it.



I wish HP would get in a design consultant.....their portables are down right ugly.

Specs are impressive but $3000 would get you a very sexy Mac portable :)

[Wayne Davy]

Is it hard to justify the 100% work usage with an external Digital TV Tuner in the package? :D :D :D
Hehe Jack, I guess. However, I missed out on the Tuner deal (bought one month too early). Anyway, it would not matter as it is a freebee for tax purposes (we all know it is built into the cost but anyhoo). AND, you just say you dont use it in the lappy but in your kids/wifes/other pc :D

[Wayne Davy]

I wish HP would get in a design consultant.....their portables are down right ugly.

Specs are impressive but $3000 would get you a very sexy Mac portable :)Kiwigeo,

I (and lots of my friends) think mine looks great - horses for courses I guess. I personally dont like the Mac Laptop designs - too white.

The pictures of these dont do them justice - check one out in real life.

[johnc]

As pointed out laptops don't attract FBT, only desktops. Your employer has made a claim for the machine which means you can not, even though the invoice is in your name. The basic principle is that you cannot claim twice for the one expense/cost. You are right in saying that some accountants seem to think that you can, and in all liklihood if you faced an ATO audit the production of the valid invoice would allow you to make the claim providing the ATO didn't twig the sacrifice arrangement existed. Laptops are depreciated items and I saw an earlier post with some rates, these have recently changed.

Your employer can claim the cost of the laptop outright, although if he had bought it for staff use (not salary sacrifice) it would also be depreciation in his hands.

JohnC

[ndru]

Your employer has made a claim for the machine which means you can not, even though the invoice is in your name. The basic principle is that you cannot claim twice for the one expense/cost...
Your employer can claim the cost of the laptop outright, although if he had bought it for staff use (not salary sacrifice) it would also be depreciation in his hands.

Correct, but Kiwi's question goes to "who can deduct for depreciation", which depends on whether or not the employer reduces the employee's salary to offset its cost of reimbursing the employee for the laptop purchase (ie the employee "salary sacrifices"). If there is no reduction in salary then the employer has incurred the cost and is able to make a depreciation deduction, not the employee. Income tax deductibility does not depend on if the employer incurs FBT expense on the purchase.

I had a look at the zd8004 and zd8005 yesterday. At 4.2kg the HP it isn't exactly "portable". I'm with Wayne on its appearance, though. Its refreshing to see some technology in a shiny black motif. I'm so over charcoal and brushed aluminium! The shabby chic Mac didn't appeal to me either - too sterile.

The only thing putting me off getting one is that our corporate sacrifice scheme only reimburse over a 12 month period. :( Will wait a few months until my cash situation improves a bit.

Wayne - I read somewhere that the Pavilion's keyboard gets hot (about 45C). Is this your experience?

[kiwigeo]

The only thing putting me off getting one is that our corporate sacrifice scheme only reimburse over a 12 month period. :( Will wait a few months until my cash situation improves a bit.



Interesting info.....one accountant I talked to reckoned that salary sacrificing had to involve reimbursment of the wmployee over a 1 year period to satisfy ATO regulations...she reckons she got this straight from the ATO but I cant find ANY reference to this on their website.

Bottom line seems to be that you can talk to 6 different people in the ATO and get 6 totally different answers. Not good enough in my opinion.

[kiwigeo]

Kiwigeo,

I (and lots of my friends) think mine looks great - horses for courses I guess. I personally dont like the Mac Laptop designs - too white.

The pictures of these dont do them justice - check one out in real life.

Did the HP/Compaq portable thing and hated the machines.....I have HP to thank for spurring me into making the changeover to the dark side.

Interesting comments from you about your keyboard running hot. 45 deg C is very hot.....is the fan kicking in as it should be? My last (HP) laptop had serious overheating problems and it was after the third cooked motherboard had been replaced. Clearance between the underchasis fan and surface computer sat on was the issue.....basically very bad design.

[Sturdee]

Bottom line seems to be that you can talk to 6 different people in the ATO and get 6 totally different answers. Not good enough in my opinion.

And often none of them is the correct one. :( If you want to rely on ATO advice the only certain way is to get it in writing.


Peter.

[kiwigeo]

And often none of them is the correct one. :( If you want to rely on ATO advice the only certain way is to get it in writing.

Peter.

Yes agreed....it will be done when I get the time. Fitting out my new workshop more important task at present.

[johnc]

A direct answer to who gets a deduction for depreciation, no one. Oddly enough in the case of salary sacrifice on lap tops the employer can write it off in one hit, but only when bought under salary sacrifice. In normal circumstances its depreciation, and company rates are generally the same as employee rates unless you're in the simplified tax system which I might add is an oxymoron.

JohnC

[kiwigeo]

A direct answer to who gets a deduction for depreciation, no one. Oddly enough in the case of salary sacrifice on lap tops the employer can write it off in one hit, but only when bought under salary sacrifice. In normal circumstances its depreciation, and company rates are generally the same as employee rates unless you're in the simplified tax system which I might add is an oxymoron.

JohnC

John.....I dont think employer can write off full price of laptop when it's part of an employees salary sacrifice package...they can only claim GST portion of price.

I will ask ATO this when I cocntact them and get back with their answer.