Is laptops and computers
tax deductible?

Yes. A laptop or computer used in the business is an allowable expense on the cash basis, and on traditional accounting it is claimed through capital allowances, usually the Annual Investment Allowance, which gives full relief in the year you buy it (GOV.UK). If you also use it privately, claim only the business share.

A laptop is the equipment almost every sole trader buys. Whether you use the cash basis or traditional accounting, the business share of its cost usually comes off your profit in the year you buy it. The main judgement is how much it is used for the business rather than personally.

Is laptops and computers tax deductible?

The HMRC rule

Claim equipment you keep as an allowable expense on the cash basis, or as capital allowances on traditional accounting. The rule comes from Office, property and equipment, Claim capital allowances.

GOV.UK says that for equipment you keep to use in your business, such as computers or printers, you claim allowable expenses if you use cash basis accounting and capital allowances if you use traditional accounting (office, property and equipment). Computers are plant and machinery, so they qualify for the Annual Investment Allowance of up to £1 million a year (capital allowances). Where equipment is used privately too, only the business share is allowable.

When you can claim it

• A laptop, desktop, tablet or monitor used in the business, for the business share.
• Keyboards, mice, docking stations and other accessories.
• Repairs and upgrades such as more memory, as running costs or capital as appropriate.
• A second machine kept only for the business, in full.

When you cannot

• The private share of a computer also used by the family.
• A computer bought for a family member who does not work in the business.
• Gaming consoles and equipment used for leisure.
• Both the cash-basis expense and capital allowances for the same machine.

What to claim instead

If a family computer is used only occasionally for the business, a low business percentage may not be worth the argument. A dedicated work laptop is simpler: fully allowable, and easier to defend if HMRC asks.

How to decide if you can claim it

1. Was it for the business? A cost is only allowable if you incur it wholly and exclusively for the business. If it also serves a personal purpose that cannot be separated, such as clothing that keeps you warm or a meal that keeps you going, HMRC disallows it.
2. Is part of it personal? Where a cost has a business part you can identify, such as the business calls on a phone bill or the business miles in a car, you claim that part and leave the rest out, on a reasonable basis you can explain.
3. Is it a running cost or something you keep? Whether it is a running cost or something you keep depends on what you buy. Items used up within two years, and regular renewals, are running costs; things you keep are relieved through capital allowances on traditional accounting and as expenses on the cash basis.
4. Is there a specific rule? For laptops and computers, the deciding rule is equipment you keep, such as a computer: claim equipment you keep as an allowable expense on the cash basis, or as capital allowances on traditional accounting.

Worked example: a web developer’s laptop

A web developer buys a £2,200 laptop used 90% for work. On the cash basis she deducts £1,980, 90% of the cost, in the year she pays for it. On traditional accounting, the Annual Investment Allowance gives the same £1,980. When she sells it three years later for £600, 90% of the proceeds (£540) comes back into her profit.

Selling or replacing a computer

Relief for a computer's cost is balanced when you dispose of it. On the cash basis, sale proceeds are business income; on traditional accounting, they reduce the capital allowances pool and may create a balancing charge. Trading in an old laptop against a new one counts as a sale at the trade-in value. Giving it to a family member is a disposal at its market value.

Private use

A laptop used for streaming and personal browsing in the evenings is not wholly for the business. Estimate the business share honestly, for example by hours used for work, and apply it to the cost. On traditional accounting, an asset with private use goes into its own single asset pool and its allowances are restricted.

Computers bought before you start

If you bought a laptop before starting your business and then use it in the business, you can bring it in at its market value when you start using it for the business, for the business share. Keep evidence of when and at what value, such as a second-hand price for the model.

Where it goes

On the cash basis, the laptop's cost is an allowable expense: small office equipment goes in box 23 with other office costs. On traditional accounting, it goes in the capital allowances section of the full self-employment pages rather than an expense box. Your software or accountant keeps the capital allowances record.

Tablets and second screens

Tablets, second monitors and graphics tablets follow the same rules as a laptop: equipment you keep, relieved in full on the cash basis or through the Annual Investment Allowance on traditional accounting, for the business share. A tablet used mostly for reading and entertainment at home is hard to justify; one used to take bookings, show clients designs or take card payments is a clear business tool.

Where it goes on your return and in MTD

On the self-employment pages of your return, the claimable part of laptops and computers belongs in phone, stationery and other office costs (SA103F box 23). The same category is used in Making Tax Digital quarterly updates, so recording it in the right place once keeps both returns consistent.

If your turnover was under £90,000, you can use the short self-employment pages (SA103S), which ask for a single figure for total allowable expenses rather than a box-by-box breakdown, and the full pages let you give just a total in box 31 too. The category still matters for your own records and for Making Tax Digital, where each quarterly update uses the same categories unless you choose to send one consolidated figure.

The accounting basis changes when a cost counts. On the cash basis, the default for sole traders since 2024/25, it counts when you pay it; on traditional accounting, when you incur it, with things you keep claimed through capital allowances.

How much an allowable cost saves

An allowable expense does not come back to you in full: it reduces your profit, so it saves tax at your marginal rate. For a sole trader in England, Wales or Northern Ireland that is 26p in the pound at the basic rate (20% Income Tax plus 6% Class 4 National Insurance) and 42p at the higher rate. The sole trader tax calculator works out the figure for your own profit.

What £1,000 of allowable expense saves a sole trader in 2026/27

• Basic rate (20% + 6%)£260
• Higher rate (40% + 2%)£420
• Additional rate (45% + 2%)£470
• Allowance taper band (60% + 2%)£620

Records to keep

Keep the invoice for the computer, a note of the business-use percentage and how you estimated it, and, when you sell or replace it, the sale price. The same applies to accessories and upgrades.

If Making Tax Digital for Income Tax applies to you (qualifying income over £50,000 from April 2026, £30,000 from April 2027 and £20,000 from April 2028), the records must be digital, and each quarter's costs go into a quarterly update. Check your date with the MTD requirement checker.

Common mistakes

• Claiming the whole cost of a family computer used mainly privately.
• Forgetting to include sale proceeds when you sell an old laptop.
• Claiming a laptop twice, as an expense and through capital allowances.

Related expenses

This item sits in the phone, stationery and other office costs category, alongside broadband and internet, mobile phone, software and subscriptions, stationery and postage and streaming subscriptions. The A to Z of expenses answers the same question for every other cost.

If you record your costs in TapTax, each one lands in the HMRC category it belongs to, with its receipt attached, so your quarterly updates and year-end return use the same figures.