Sony PS3 on expenses

[Bengal]

A simple test is this.

Are you a M.P? If not then these kind of things are not allowed because you have to play by the rules. However if you are a M.P. then expense it as you make up the rules and can do what you like. Also buy yourself an X Box, PSP and a Wii while you are at it for your second or third home. There is a special MP game out there called Moat Cleaner 4 & the secret of duck island which you could easily get through.

Love it!

[BoredBloke]

A simple test is this.

Are you a M.P? If not then these kind of things are not allowed because you have to play by the rules. However if you are a M.P. then expense it as you make up the rules and can do what you like. Also buy yourself an X Box, PSP and a Wii while you are at it for your second or third home. There is a special MP game out there called Moat Cleaner 4 & the secret of duck island which you could easily get through.

[Fred Bloggs]

Why are you all bullying me? Its not my fault I am new. I genuinely wanted to know what the ramifications of 'polishing' my tax liabilities are.

I got two (fairly vague) answers so thanks for those; to the others I suggest you get a girlfriend.

Frankly, if you're not a professional PS3 developer, then IMO the very question itself is simply stupid. HMRC's rules on "wholly and exclusively for business use" are pretty simple, no?

[Bengal]

Does it have to be though? Permies are frequently allowed to take 'their company laptop' home and use them for web-browsing. Some companies allow permies to make personal calls on the office phone system, or use the PCs for personal stuff (browsing, playing games) at lunch time.

Is the "100% business use" thing directly from law, or something HMRC use to stop contractors taking the piss at their discretion?

I take your point but HMRC will not see it that way and to try and beat them down will cost a fortune.

There are different rules for different types of workers. The use of a company owned laptop to browse the web or whatever else by a permie, is not regarded a taxable benefit on the employee provided the main purpose of providing the equipment is business related. The employee cannot claim a tax deduction for it but the employer can as clearly it is a buisness expense for a company.

In the case of a PS3, lets face it, its primary purpose is to play games and watching blu-ray movies all of which I would suggest fall more ion the personal side of things rather then the business side of things. That siad, if your buisness is game console design and manufacturing or game development then you might have an arguement for a deduction but again the development side of things would need to be for that particular games console.

[d000hg]

It's a grey area. HMRC are pretty savvy to this kind of thing and you would have trouble demonstrating it was "wholly and exclusively" for business use - which of course it isn't as soon as you put a game in it or your kid touches it.

Does it have to be though? Permies are frequently allowed to take 'their company laptop' home and use them for web-browsing. Some companies allow permies to make personal calls on the office phone system, or use the PCs for personal stuff (browsing, playing games) at lunch time.

Is the "100% business use" thing directly from law, or something HMRC use to stop contractors taking the piss at their discretion?

[Bengal]

Why are you all bullying me? Its not my fault I am new. I genuinely wanted to know what the ramifications of 'polishing' my tax liabilities are.

I got two (fairly vague) answers so thanks for those; to the others I suggest you get a girlfriend.

Mate, HMRC are unlikely to agree to the expense of a PS3 having been incurred wholly, exclusively. HMRC has this concept of duality of purposes which it will use when it suits them.

Should HMRC successfully argue that it is not an allowable expense, the following will happen:

1. You will have to pay the additional income tax arising,
2. Interest will also be charged on the additional tax payable as it will have been deemed to have been paid late, and
3 HMRC will generally seek a penlaty. The level of penlaty will depend on the behaviour and nature of the "iffence" as it were but I would be looking at around 15% of the additional tax payable as a guide (it could be higher if HMRC think you sought a deduction when you knew one wasn't due).

Further ramifications can be that HMRC open enquiries into eralier years on the basis that if you've done something like this in one year what have you done in previous years. HMRC can go back as far as 20 years under the "discovery" rules.

[KevinS]

Why are you all bullying me? Its not my fault I am new. I genuinely wanted to know what the ramifications of 'polishing' my tax liabilities are.

I got two (fairly vague) answers so thanks for those; to the others I suggest you get a girlfriend.

The simple answer is: Don't do it. The reason I say this, is if the tax man does pull you up on it, then they start investigating all your tax affairs for any other kind of irregularities.. That will not be pretty, I can promise you. Only expense those things that are wholly and exclusively used for your business (i.e. NO private use)..

[chavvy]

Why are you all bullying me? Its not my fault I am new. I genuinely wanted to know what the ramifications of 'polishing' my tax liabilities are.

I got two (fairly vague) answers so thanks for those; to the others I suggest you get a girlfriend.

[NotAllThere]

...This noob trolling is pretty poor, ...

Yep. I don't think there's been a genuine newbie for weeks.

[BrilloPad]

Hi,
I am going to put a recently purchased PS3 on expenses and therefore offset some tax from my Ltd.

Its important for my IT business because I can watch blue ray DVDs on it which have educational value in my chosen sector. Also its got a hard drive in, so it is sort of just computer equipment.

Anyhow the question is, if I am investigated and the HMRC disagree with me as to the business validity of the PS3 what would be the upshot? I imagine that they would simply make me take it off as a business expense and make me pay back the tax I would have avoided. Or would it be more dramatic than this? would there be penalties to pay?

A bigger problem than penalties is the fact that they might turn your business upside down. Will cost you alot of time and effort.

IMO keep well clear.

[gingerjedi]

I'd buy three of them, one for home, one for the car and a spare one if I were you.

Don't forget a 50" plasma for each.

This noob trolling is pretty poor, though I do sit next to a new contractor who is claiming 40p mileage and VAT from his petrol receipts and just about anything else he buys... he read it was ok somewhere no accountant either...

[moorfield]

Anyhow the question is, if I am investigated and the HMRC disagree with me as to the business validity of the PS3 what would be the upshot?

It's a grey area. HMRC are pretty savvy to this kind of thing and you would have trouble demonstrating it was "wholly and exclusively" for business use - which of course it isn't as soon as you put a game in it or your kid touches it.

You could consider putting a mileage claim through your books that just happens to come out at the same amount - you don't need any receipts for that and
difficult for HMRC to prove you weren't going off to see a client / interview / training day etc.

[Fred Bloggs]

I'd buy three of them, one for home, one for the car and a spare one if I were you.

[chavvy]

Hi,
I am going to put a recently purchased PS3 on expenses and therefore offset some tax from my Ltd.

Its important for my IT business because I can watch blue ray DVDs on it which have educational value in my chosen sector. Also its got a hard drive in, so it is sort of just computer equipment.

Anyhow the question is, if I am investigated and the HMRC disagree with me as to the business validity of the PS3 what would be the upshot? I imagine that they would simply make me take it off as a business expense and make me pay back the tax I would have avoided. Or would it be more dramatic than this? would there be penalties to pay?