26/03/2026
t is the time of year, just before the tax/ financial year end (31st March for companies, 5th April for non corporate businesses) when much tax planning takes place, taking advantage of tax reliefs before they are lost, making business and spending decisions with one eye on minimising end of year tax bills.
One of the common suggestions may be to time the purchase plant and equipment, machinery, fixtures etc which need replacing, updating or renewing. A new computer for a sole trader purchased on 5th April will get the tax relief a full year earlier than one where acquisition is delayed until the following day.
However, one of the great misconceptions is this (and I hear this A LOT)
“I estimate my tax bill to be £2,000, I need a new hi spec laptop and a new monitor and printer, if I spend £2,000 on these it wipes my tax bill out”
I have then have to explain that it doesn’t work like this (and it can be challenging to get the concept across)
If you spend £2,000 as a sole trader, you only get the tax and self employed NI back, not the full amount, so it will save you £520. The remaining £1,480 is still a cost to you.
The key message is, if you were planning on replacing the laptop anyway, or updating the monitor, then go ahead and do it sooner rather than later if you are able to. But don’t just go spending the money because you think the £2,000 will be paid in full by the tax bill. It won’t. If your laptop is just fine, your monitor works perfectly and your printer still does the job, you’ll just end up spending £1,480 that you didn’t need to. It’s still wasted money – and chances are, by the time your current laptop gives up the ghost, the one you’ve got sat there unused will have been superceded anyway, so it really will be money down the drain….
