Reply to: Photography Course: Expensable?

[Malcolm Buggeridge]

.

If you're not on talkphotography.co.uk yet, you probably should be. Many people there would be happy to advise on which courses to try and which ones to give a miss!

Thanks - I will definitely look into that.

[Jessica@WhiteFieldTax]

Isle of Man is old hat. There are some interesting planning opportunities with Isle of Wight companies though; at least interesting for me.

[eek]

Only works if you are a MP; for mere mortals 25.8% NI plus the kids own tax eliminates the savings - unless you you just make them a temporary shareholder for the summer, give them shares in June, gift them back in September - that's a goer!

Could I pay them via an employees beneficial trust running in the isle of man using fake loans in strange currencies? or do you think HMRC may see through it?

[Jessica@WhiteFieldTax]

I wasn't planning to pay their uni fees through the company. Instead I was going to pay them a lot for doing very little over the summer hols ala a few MPs five years back.

Only works if you are a MP; for mere mortals 25.8% NI plus the kids own tax eliminates the savings - unless you you just make them a temporary shareholder for the summer, give them shares in June, gift them back in September - that's a goer!

[eek]

No; a lot of items can't be expensed even if they are to generate funds, eg capital costs of a franchise, new skills type training for controlling directors/shareholders - anomaly, in so far as similar training for a unconnected member of staff would go through (not unconnected: your kids uni fees don't fit in here!)

I wasn't planning to pay their uni fees through the company. Instead I was going to pay them a lot for doing very little over the summer hols ala a few MPs five years back.

[Jessica@WhiteFieldTax]

IANAA but surely a business can expense something intended to bring in future profit? (by contrast with an employee, who may not expense something intended to get a different job).

No; a lot of items can't be expensed even if they are to generate funds, eg capital costs of a franchise, new skills type training for controlling directors/shareholders - anomaly, in so far as similar training for a unconnected member of staff would go through (not unconnected: your kids uni fees don't fit in here!)

[Jessica@WhiteFieldTax]

If you are doing web work already then to me a photography course isn't out of the question; I see a lot more tenuous deductions!

[SueEllen]

Aren't all plans B's caught by this then unless they earn from day one?

Depends what the plan B is and how it links in with your current skills.

[formant]

I think I'd benefit from the structure of a course. They also have tutors to give feedback on progress. If they do as they claim, the ones I've looked at shouldn't be a waste of money.

Even with a course, I'd still try to find a hands-on/in-person one. Problem with photographers is that a lot of them only go into training because they don't make enough from photography alone (often related to just not being that great). So do choose wisely, whichever option you go for.

If you're not on talkphotography.co.uk yet, you probably should be. Many people there would be happy to advise on which courses to try and which ones to give a miss!

[Mister Clark]

If I may: Salary circa £7,000; VAT Flat rate profit; spousal shareholding; withdraw up to max per annum before hitting 40%; pension contribution; tax efficient company closure. Some or all of these.

WHS - but you have to take a longer term view of things or be married to get that sort of retention.

Personally I am not married so pay salary circa 7,500, dividends up to the 40% threshold and pension. I tend to take 6 months of in every 3 years and drawn down on the retained profits.

I have a large cash surplus at the moment and will be closing my company down and applying for entrepreneurs relief. If that does not get challenged by HMRC when I file my personal tax return for the year I should have ended up, at a guess, 82/83% retention over 6 years even when CG is applied and the fees for the administrators are accounted for.

[stek]

Photography Course: Expensable?

Aren't all plans B's caught by this then unless they earn from day one?

[northernladuk]

Well, all I can say is that there is a genuine business motivation behind this.

There is your answer then. And if this is the case don't forget to put in for larger microsims if needed, photoshop and any other connected costs. If you are gonna do it then do it properly.

[Alan @ BroomeAffinity]

[QUOTE=Malcolm Buggeridge;1716433Long term? Please enlighten me Mr Clark...[/QUOTE]

If I may: Salary circa £7,000; VAT Flat rate profit; spousal shareholding; withdraw up to max per annum before hitting 40%; pension contribution; tax efficient company closure. Some or all of these.

[Malcolm Buggeridge]

Most would argue that is all you can do with it but it is up to you. If you really believe if is wholly and exclusively for your business then just go ahead and do it. If your accountant agrees then jolly good.

It's your business, you make the decisions as it is your risk at the end of the day. The only thing I would say is look at the actual costs and remember you are only saving yourself 20% for this risk (plus being able to divi a little more) and then ask yourself if it is really worth it.. for a mega bucks contractor? I doubt it but it's your business.

Well, all I can say is that there is a genuine business motivation behind this.

if you look a bit more long term you can easily retain 85% of what you bill.

Long term? Please enlighten me Mr Clark...

[Mister Clark]

Most would argue that is all you can do with it but it is up to you. If you really believe if is wholly and exclusively for your business then just go ahead and do it. If your accountant agrees then jolly good.

It's your business, you make the decisions as it is your risk at the end of the day. The only thing I would say is look at the actual costs and remember you are only saving yourself 20% for this risk (plus being able to divi a little more) and then ask yourself if it is really worth it.. for a mega bucks contractor? I doubt it but it's your business.

WHS.

To answer your question, if its wholly and exclusively for business use then put it through the books and it won't be subject to any BIK so long as the tax man agrees with your reasoning should you be asked the question.

If it aint your gonna pay BIK on it. That's why you don't use your company to pay for a load of stuff - the tax man want's his pound of flesh and he is gonna get it one way or another.

The general themes of your posts seem to be ways you could reduce your personal tax burden (nothing wrong with that); if you look a bit more long term you can easily retain 85% of what you bill.