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Purchase of fixed assets COGs

A friend of mine who is an accountant checked my figures first but I cant find the suitable box to fill in what he has called COGs - which is for affectively assets ive purchased

5 Comments

T
Tim Fouracre Staff 28 Dec 2025 at 19:02
For Cost of Goods Sold (COGS) - the cost of stock or materials you've purchased to sell - use the "Cost of raw materials and consumables" field in the Profit & Loss section.
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Ben Amesbury 28 Dec 2025 at 19:05
thanks alot. I did wonder if that was the case, what about things that would be classed as "tools of the trade" that have long term value (a sort of asset I guess)
as opposed to just a consumable or goods to be sold?
T
Tim Fouracre Staff 28 Dec 2025 at 19:10
For "tools of the trade" with long-term value (equipment, machinery, computers, vehicles, etc.), these are treated differently from consumables:

1. Balance Sheet → Fixed Assets Enter the total value of your long-term equipment in the Fixed Assets field. This might be hidden by default - click "Show all" at the top of the Balance Sheet section to reveal it.

2. Tax Computation → Annual Investment Allowance (AIA) You can claim tax relief on equipment purchased this year using the Annual Investment Allowance field (up to £1 million). This gives you immediate tax relief on the full cost of qualifying equipment - no need to depreciate over multiple years.

3. P&L → Depreciation (if not using AIA) If you've already been depreciating assets (rather than claiming AIA), that annual charge goes in "Depreciation and other amounts written off assets" in Profit & Loss.

Quick example:

- You buy £2,000 of audio equipment → Enter £2,000 in Fixed Assets (Balance Sheet) AND £2,000 in Annual Investment Allowance (Tax Computation)

- This reduces your taxable profit by £2,000

The key distinction:

- Consumables/stock (goods you sell or use up quickly) → Cost of raw materials and consumables

- Fixed assets (tools/equipment you keep long-term) → Fixed Assets + Annual Investment Allowance
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Ben Amesbury 28 Dec 2025 at 19:15
cool - so just to confirm - I'd leave them off the p/l as the 'tax computation" will account for it CT wise?
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Tim Fouracre Staff 28 Dec 2025 at 19:28
Yes, that's exactly right!