Reply to: Buying a Caravan through Limited

[malvolio]

Personally I've incurred hotel expenses for a whole weekend away when my car broke down, as it was forced upon me.

People scared of HMRC clamping down on such trivial things have obviously never dealt with them about such trivial things, or I was lucky.

Just don't take the piss too much and they'll find bigger fish to fry.

IIRC you can legitimately claim expenses while staying at a relative's if it's a reasonable alternative to a b&b (i.e. close to the client), though they're supposed to declare this income just as if they had a lodger in.

So an alternative may be to hire the caravan off a relative if you don't want the hassle of listing it as an asset.

Actually, the point I was making was not that staying an extra night was a no-no but that Hector will find it very easy to challenge the "wholly and exclusively" status for almost anything that has a potential element of personal usage. You have to be able to demonstrate why the thing qualifies as "wholly and exclusively" should HEctor ask. If you can, then no problem.

[PAH]

Personally I've incurred hotel expenses for a whole weekend away when my car broke down, as it was forced upon me.

People scared of HMRC clamping down on such trivial things have obviously never dealt with them about such trivial things, or I was lucky.

Just don't take the piss too much and they'll find bigger fish to fry.

IIRC you can legitimately claim expenses while staying at a relative's if it's a reasonable alternative to a b&b (i.e. close to the client), though they're supposed to declare this income just as if they had a lodger in.

So an alternative may be to hire the caravan off a relative if you don't want the hassle of listing it as an asset.

[tarbera]

Company Race horse

My Company Race horse cost a bloody fortune - I do not advise

[malvolio]

Piffle. Another daft statement that proves that you really don't have a clue about expenses.

If you work late on a Friday and you choose to stay over at some place near work rather than travel home then it's a business expense, wholly and exclusively.

I do have a bit of a clue, actually. I also have an understanding of Hector's mindset. I also know people who have had Friday night accomodation expenses disallowed, since the hotel booking occurred after the end of their contracted working week so as far as Hector is concerned where you spend your weekend is up to you and nothing to do with business. Duality of purpose writ large.

Anyway, none of this is hard and fast, as you seem to believe, HMRC will reinterpret as they see fit. The point is that people are both aware of the risk and can prepare for it.

[Wanderer]

No it won't be, as far as Hector is concerned. Look up "Duality of purpose". For example, stay in it over a Friday night after a late finish and you lose.

Piffle. Another daft statement that proves that you really don't have a clue about expenses.

If you work late on a Friday and you choose to stay over at some place near work rather than travel home then it's a business expense, wholly and exclusively.

[TimberWolf]

Ugggghh, a caravan. Surely a van, which is like a mini motorhome, is far better and more convenient than a disgusting chavy caravan. A van might be easier to put through the books as a business expense too, than a filth infested bank holiday nightmare and traffic hazard?

[ASB]

A painting would be a great idea and one I thought about at the weekend but decided to steer clear of it.

Only if you can avoid the BIK, otherwise it would be a poor idea. Tax on 20% of it's value would soon erode any potential gain. Especially since the painting would not normally be a wasting asset and wopuld be expected to be sold on at its original or increased value (suffering CT on any profit).

Of course in order to have any possibility of BIK The painting would need to be on show in the home office or similar.

[Wobblyheed]

Yeah but they don't earn tons of money for doing f' all and then attempt to hide as much of it as possible so as to give next to nothing to the gov.... Oh... hang on....

[ASB]

I was thinking of something a little more exciting / unique - a painting, a horse etc?

Absolutely anything. There are special rules related to vehicles and a few other things.

In terms of a Horse yes it would be purchasable and almost certainly the BIK would land to the individual. However the maintenance of said horse, feed, farrier, vet, tack and all the usual tulip would not be allowable for CT.

The purpose of the BIK charge on assets placed at an employees disposal is to try and discourage this sort of behaviour by making it tax inefficient for the employee given the BIK charge and the 1A NIC charge.

It can still be effective with rapidly wasting assets, think yacht, aircraft this sort of thing.

Also the bik position is such that it is only chargeable if personal use more than incidental to corporate use. HMRC have clarified this with respect to compyters for example. I wouldn't expect them to be offering any clarification soon on horses, caravans etc al though.

[FiveTimes]

A painting would be a great idea and one I thought about at the weekend but decided to steer clear of it.

[SneakySimon]

Asset

I was thinking of something a little more exciting / unique - a painting, a horse etc?

[TheFaQQer]

I didn't know about the ability to purchase assets - may have to look into this - though struggling to think what I could realistically purchase - anyone got any examples (apart from Tractors?!!?!?)

Computer?

[SneakySimon]

Assets

I didn't know about the ability to purchase assets - may have to look into this - though struggling to think what I could realistically purchase - anyone got any examples (apart from Tractors?!!?!?)

[ASB]

It's absolutely fine. It's an asset not an expense.

If HMIT is not prepared to accept wholly and exclusively - though they may - then it is taxable to the person who gets the benefit based on its purchase price.

http://www.hmrc.gov.uk/guidance/480_chapter6.pdf

It may also be assessable to class 1A NI (not sure).

It may still be cheaper to do it this way than buying it personally, only you can work that out based on your overall position (and what you perceive the risk of it getting assessed as an asset at your disposal is).

Personally I got taxed on this basis as a result of inspection on a tractor, a lawn tractor and all sorts of other bits and pieces. Given the useful life of the asset it was a far cheaper way of doing it.

[northernladuk]

Some ex-residents of Dale Farm may challenge that.....

Yeah but they don't earn tons of money for doing f' all and then attempt to hide as much of it as possible so as to give next to nothing to the gov.... Oh... hang on....