Imported equipment or resale stock in UK accounts?
Classify imports by their intended use: machinery kept for production normally belongs in fixed assets, while goods bought to resell belong in stock. Identify attributable delivery and installation costs, then let your accountant settle capitalisation and tax relief. Supplier cost breakdowns can be requested through Cambridge China Bridge.
Start with what the business will do with it
Ask whether the business will keep the item to make products or sell the item itself. A production machine is normally a fixed asset; machinery bought by a dealer for resale is stock. The description on the supplier invoice alone does not answer that question.
Mark the intended use against each purchase line before sending it to your accountant. Separate your own production equipment from resale goods even when they arrive together. Flag demonstration machines, spare parts and any change of intended use for individual review.
Build the equipment cost from supporting invoices
HMRC guidance says costs of bringing a new asset into use, including transport to its intended site and erection or installation, should be capitalised as part of its cost. Capitalisation means recording expenditure as an asset rather than charging the whole amount immediately as an operating expense.
Prepare a cost schedule covering the purchase, freight, handling, delivery, unloading, positioning and installation. Show what each charge achieved and which machine it relates to. Ask your accountant to assess commissioning, testing, training, maintenance and site works separately rather than treating every launch cost alike.
Keep resale costing separate from equipment accounting
For resale goods, use our landed-price guide to assemble the buying and shipping costs. Keep that commercial pricing calculation separate from the accountant's decisions about asset recognition and expense timing.
Where equipment and stock share a shipment, request separate packing details and allocate shared charges using a documented basis that reflects the charge, such as freight space or handling work. Keep the calculation and invoices together so your accountant can review the allocation.
Let your accountant determine the tax treatment
Accounting depreciation is not an allowable deduction when calculating taxable trading profits. Capital allowances are a separate form of business tax relief. Do not assume that recording a machine as a fixed asset settles the tax claim.
Ask your accountant to confirm the applicable accounting basis, capitalisation policy, depreciation treatment and available tax relief before finalising the accounts. Provide the business structure, intended use, purchase terms, payment records and installation evidence. Ask them to confirm how recoverable and unrecoverable VAT affect the recorded cost. For teaching laboratories, see import relief and equipment acceptance.
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Prepare an accountant-ready purchase file
Keep the order, itemised supplier invoice, shipping and customs paperwork, delivery invoices, installation scope and acceptance record together. Record arrival, installation and readiness for use separately. For the operational arrangements, follow our machinery installation and commissioning guide.
Ask Cambridge China Bridge to request an itemised breakdown from the factory through its staff in China. Send your accountant a short note explaining which items you will retain, which you will resell and which costs remain unclear. Resolve bundled charges while the supplier can still explain them.
Frequently asked questions
Is imported machinery a fixed asset or stock?
Machinery kept for production is normally a fixed asset. Machinery bought to resell is stock. Tell your accountant the intended use, including any demonstration use or later change of purpose.
Can delivery and installation be capitalised?
HMRC guidance includes transport to the intended site and erection or installation in the cost of bringing a new asset into use. Keep itemised invoices and ask your accountant to assess the attributable costs.
Can I deduct machinery depreciation for tax?
Accounting depreciation is not an allowable deduction in calculating taxable trading profits. Ask your accountant to assess capital allowances separately.
What if the invoice bundles machinery and training?
Request a breakdown showing equipment, delivery, installation, training and support separately. Give the scope of each service to your accountant rather than assigning the whole invoice to equipment.