Originally posted by pscont
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1) Borrow £1000 and pay back, say £2000 (so £1000 in interest). You might save £190 on your Corp Tax bill, but the other £810 is lost to the payday lender forever. So yes, it reduces your tax bill, but the overall loss to the business is far higher.
2) Set up your own payday lender, become regulated and all that. Pay £1000 in interest. You'd save £190 in Corp Tax, but the £1000 profit your pay day lender created would pay £190 in Corp Tax. That company would have its own accountancy costs and whatnot. So the overall loss is higher than had you not bothered.
3) Jail time. If HMRC managed to stop laughing at such a moronic 'scheme', that is. 'Schemes' to evade tax should result in you having more money afterwards (but before the court case), not less.
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