expense - reduce tax ?

[BA to the Stars]

are PAYE phones and camcorder considered by HMRC for business purpose (ofcourse it can be used for personal use also but in this case the phone would be needed for my wife to answere calls? and the camcorder is for taking photos and videos)

I think you mean PAYG - PAYE will have people screaming at you and calling you a permie

A good rule of thumb is to think if I have the tax man sat next to me and ask why has the company bought such and such an asset, could I justify that it was for the business and that the business needed it. If it was say a camcorder, could you then produce business films and pictures taken using it or just family outing videos?

[northernladuk]

I think you mean PAYG - PAYE will have people screaming at you and calling you a permie

A good rule of thumb is to think if I have the tax man sat next to me and ask why has the company bought such and such an asset, could I justify that it was for the business and that the business needed it. If it was say a camcorder, could you then produce business films and pictures taken using it or just family outing videos?

You have to remember though HMIT man will have seen it all. He won't be a push over, it's his job. If HMIT are anything like Quality Auditors then I think many of us are under estimating them. They get one sniff of something fish and no amount of squealing is going to work I reckon.

[psychocandy]

I also find it hard to believe that people think that spending loads on expenses is somehow a great way to earn more money and pay less tax. Yes, if you earn £100K and manage to find something to spend all of it on (might be difficult to justify) then congratulations you'll pay zero tax all year but you wont have any income either (apart from some nice toys maybe!)

You need to think of it as a 20% discount off something you buy. And then only allowable if its for a business use.

For instance, if you think you can justify a new PC for home then fair enough. But, in effect, your only getting a 20% discount by not paying CT on the money.

E.g. £500 paid as dividend = £400 (or so because its not quite like this is it with the tax credit?) in your pocket.

Or £500 PC, no tax, no money in your pocket but a £500 PC.