Buying luxuries and...
 

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Buying luxuries and unnecessary equipment for business

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From time to time I come across businesses who seem to buy things for their own personal satisfaction, rather than presumably make more (taxable) profit. Of course there's a bit of assumption on my part here, and it's rarely clear cut. And I may well be incorrect.

I seem to remember some rules about "not attempting to make a profit", but what if you're doing better than that despite your extravagances? Is it a case of you shouldn't, but lots of people do, and you'll almost certainly get away with it?

Take an estate agents whose staff all have £2k MacBook Pros. Clearly unnecessary item for the job, but you could argue that it gives a premium impression to customers and helps keep staff happy.

Or take a builder who has just his own van, he has a high spec model with alloy wheels and a few options, and he's gone to town with all sorts of flashing light accessories. I'd say he probably only has that just because he likes it.

Finally a business who owns and operates quite a bit of plant and machinery to do their work. The owner loves having and using all this kit. So he has way more of it than is sensible for the size of the operation, has oversized and overspecced plant for the jobs they do, and replaces them with new after a year or two despite them not having done much work. I guess in MTB terms it would be an XC fitness coach sole trader that runs a fleet of £10k enduro and downhill bikes as business equipment, replacing them every two years.

Another example, local gym and outdoor fitness coach which is around the place in a Mercedes 4x4 pickup. Carries a few fitness balls, cones, and hoops in the back. Could easily do with small van.


 
Posted : 13/07/2023 12:05 am
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Shit, are you my accountant ? 😉


 
Posted : 13/07/2023 12:22 am
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What?


 
Posted : 13/07/2023 12:27 am
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Unless HMRC take an interest...pffft.


 
Posted : 13/07/2023 1:01 am
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Take an estate agents whose staff all have £2k MacBook Pros. Clearly unnecessary item for the job, but you could argue that it gives a premium impression to customers and helps keep staff happy.

You need to look at the cost of ownership across the life of the equipment. A decent business-class laptop (either Windows or Mac) will run fine for ten years and not constantly annoy you with freezing under load like really cheap stuff does. When you're busy, you don't want to be losing time because you tried to cheap out on your laptop. Also, if you have to haul it around town, something light and with good battery life will save you a ton of misery.


 
Posted : 13/07/2023 1:19 am
leffeboy reacted
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MacBook Pros aren't lightweight so not suitable for 'hauling around town'.


 
Posted : 13/07/2023 1:25 am
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I seem to remember the term “wholly and exclusively” being a key term in HMRC guidance for business expenditure.  Many accountants advise their clients to spend money on renewing assets to make full use of allowances before paying tax on profits


 
Posted : 13/07/2023 6:44 am
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I can see that better / more reliable kit is clearly justified expenditure, how many professional tradesmen use B&Q own brand power tools vs DeWalt and Makita

But a lot is just image and creating the 'experience' - on the industrial estate near me there's a Jaguar showroom that has plush leather all round, posh coffee, etc., just down the same road is a used car trader on a gravel forecourt with a portacabin as office. They both sell cars in the end.


 
Posted : 13/07/2023 7:15 am
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Quite a few friends who have their own business used to tell me how their accountant had got a new bike put through the books. We no longer have those type of conversations now I work for HMRC.

Whole I wouldn’t care if my Jaguar dealer operated out a portacabin, i can see why they'd be spending money to make their target market feel more cosy.


 
Posted : 13/07/2023 7:26 am
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Yeah obvs our top-end MacBooks and iPads and iPhones and AirPods are all entirely necessary for work and the more you spend the more tax you save so no point skimping.

My wife did balk at the idea of buying a car for work purposes though, given that we work at home.


 
Posted : 13/07/2023 7:40 am
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What?
+1

good night last night was it OP? 😂


 
Posted : 13/07/2023 7:43 am
johnhe reacted
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Quite a few friends who have their own business used to tell me how their accountant had got a new bike put through the books. We no longer have those type of conversations now I work for HMRC.

Because it's totally legal, (and uses the employer side of the C2W 'legislation').

When we ran our old business we'd also stay in decent hotels - are you saying we should've stayed in cheap (shit) ones instead?


 
Posted : 13/07/2023 7:49 am
kelvin reacted
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OP Smacks of jealousy if you ask me.


 
Posted : 13/07/2023 7:57 am
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Many accountants advise their clients to spend money on renewing assets to make full use of allowances before paying tax on profits

Hiding profit from HMRC and spending money on yourself pre-tax - obviously it goes on. A lot. See also cash in hand.

HMRC barely have the resources to resolve large-scale fraud - there's no way they can catch hundreds of thousands of people skimming off the top. Loads of businesses furloughed employees during covid, then made them work like normal. How long do you think it would take to get through that lot and prove it? Then how long to actually get the money back?


 
Posted : 13/07/2023 8:01 am
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There are a bunch of HMRC rules about personal use of stuff that might answer some of those points as regards sole trader/smaller companies.

In answer to the underlying question do businesses spend money on kit that is greater than their current / short term needs of course they do. Sometimes it makes good business sense and sometimes it's lack of controls, vanity and poor management.

In the same way that in some businesses there is empire building/"bling culture" and others it can be carefully targeted.

There's loads of reasons including board room vanity to poor decision making, keeping staff happy (e.g. a BMW and a MacBook for your sales rep not a Dacia and a discount netbook), impressing customers (e.g. car showrooms - although the OEMs generally dictate standards there), sometimes because the finance deals on nicer kit with better residuals are better than the ostensibly cheaper options, plans for hockey stick revenue growth, because you have a tech geek doing the specs and noone controlling them.

That fancy head office with good coffee - does it keep staff and clients happy and make a good environment to do business that saves you staff and client churn? Has it got the latest energy saving tech? Does it have room for your growth plans or are you going to close a satellite site and bring more people together. One person's business case is an outsider's vanity project.

It happens the other way round just as much. Companies buy kit that's not up to the job and find they have productivity and quality problems or wound up and unhappy staff that are trying to do their job with half the right tools.

Either in extreme is potentially destructive and if done in an uncontrolled manner without the right financial assessments you're fairly likely to be seeing someone like me professionally at some point to work out what's got to be done with the broken shell of the business.

Edit - excuse the disjointed paragraphs first cup of tea just kicking in and I'm typing on the phone.


 
Posted : 13/07/2023 8:13 am
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So who should make the decision of what is the correct level of car / coffee / sofa / board room table?


 
Posted : 13/07/2023 8:23 am
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When they spend this money it is gone.

If they kept the money some of it would have gone to the taxman and some to their pocket, but they chose to spend it, not keep it.

When they spend this money, it pays the wages of whoever they bought it off, and they will pay some tax and buy things of someone else who will pay some tax.

I'm happier they are spending money rather than hoarding it as that's what makes an economy.


 
Posted : 13/07/2023 8:34 am
 DT78
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10 years ago I worked with an IT contractor who had a VW camper as a 'mobile office' for working away from home a rib for 'client entertainment' and a chromed harley as his company vehicle.

Whenever he bought a round of drinks he'd retain the receipts to claim.  Whilst us scummy PAYE's had to suck up the full cost.

Jealous?  Just a bit.  Earning 3 times as much and playing the tax game.....


 
Posted : 13/07/2023 8:36 am
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There may be a tax saving in having a fancy motor put through a business (and then available for personal use), but it's still an expense to the business - so this kind of thing is largely self-regulating and not worth HMRC's time and effort to attempt to police.

With regards to supplying staff with fancy laptops, what real benefit-in-kind do you think the estate agents are getting from them?


 
Posted : 13/07/2023 8:39 am
footflaps reacted
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Loads of it goes on. Wife worked for a bloke that put virtually every living expense through the company, so it all went to directors loans, then got taxed as a benefit, that was then paid via the 'company' and again went on director's loans - revolving money.

Couple of blokes I worked for in a big construction company used to run all sorts of stuff through the business. One even had one of the 'site' staff virtually as his house full time doing DIY and various extensions on the property.

Or the example of getting a motor for work, then having a massively expensive audio/media system installed for 'the kids'.


 
Posted : 13/07/2023 8:44 am
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10 years ago I worked with an IT contractor who had a VW camper as a ‘mobile office’ for working away from home a rib for ‘client entertainment’ and a chromed harley as his company vehicle

A lot of that would raise some questions if audited.


 
Posted : 13/07/2023 8:47 am
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Are businesses not allowed to have nice stuff comrade?

I bought a fancy coffee machine through the business, it was entirely necessary for productivity.

We did get a sever audit once where HMRC went through all receipts. They don't like supermarket purchases and asked what was the business need? It was for toilet paper and cleaning materials, without out which we said the warehouse and staff would be covered in shit. They left us alone after that.

Re: hiding profit, if it looks like you are going to make a profit and therefore pay corporation tax, you can reduce that by buying stuff like Macbook Pros, and what will serve the business better? Paying more to HMRC or having some decent new laptops?


 
Posted : 13/07/2023 8:47 am
footflaps reacted
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I just think all businesses particularly charities need a swimming pool complex and spa to help them with staff morale


 
Posted : 13/07/2023 8:58 am
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Conversely my sister recalls one of her friends assuming that "putting things on expenses" just meant free goodies for her rather than it actually coming out of her (small) business accounts which was all her own money anyway!


 
Posted : 13/07/2023 9:03 am
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Quite a few friends who have their own business used to tell me how their accountant had got a new bike put through the books.

I believe it is allowable if the bike is used for commuting to the normal place of work (which of course it will be 😉 ). As a partnership, it's a tax-deductible expense, as a director of a business I assume it would be via a Bike To Work scheme.


 
Posted : 13/07/2023 9:07 am
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HMRC barely have the resources to resolve large-scale fraud – there’s no way they can catch hundreds of thousands of people skimming off the top.

Those staff are quite expensive to run too. The skimming is not worth their time or effort.


 
Posted : 13/07/2023 9:09 am
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Since our local bank closed I simply must have an emtb to get to the nearest one.


 
Posted : 13/07/2023 9:12 am
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I just think all businesses particularly charities need a swimming pool complex and spa to help them with staff morale

Or a luxury motorhome, if in the business of politics?


 
Posted : 13/07/2023 9:15 am
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I just think all businesses particularly charities need a swimming pool complex and spa to help them with staff morale

I know of one public organisation who were building a new site and when the cost cutting started the staff argued that they most definitely needed a meeting room that was big enough for the entire workforce to congregate. Somehow that "meeting room" ended up with a sprung wooden floor that was marked out for badminton, basketball, 5 a side etc.


 
Posted : 13/07/2023 9:19 am
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as a director of a business I assume it would be via a Bike To Work scheme.

You don't need to do the second bit, i.e. pay for it from salary.

Company can just buy the bike, and it's 'available' as an non-performing asset.

Assumption...


 
Posted : 13/07/2023 9:22 am
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Take an estate agents whose staff all have £2k MacBook Pros. Clearly unnecessary item for the job, but you could argue that it gives a premium impression to customers and helps keep staff happy.

Or take a builder who has just his own van, he has a high spec model with alloy wheels and a few options, and he’s gone to town with all sorts of flashing light accessories. I’d say he probably only has that just because he likes it.

Finally a business who owns and operates quite a bit of plant and machinery to do their work. The owner loves having and using all this kit. So he has way more of it than is sensible for the size of the operation, has oversized and overspecced plant for the jobs they do, and replaces them with new after a year or two despite them not having done much work. I guess in MTB terms it would be an XC fitness coach sole trader that runs a fleet of £10k enduro and downhill bikes as business equipment, replacing them every two years.

Another example, local gym and outdoor fitness coach which is around the place in a Mercedes 4×4 pickup. Carries a few fitness balls, cones, and hoops in the back. Could easily do with small van.

What a strange thing to query!

It's not just businesses, you could apply your questions to almost everything in life - why have a sofa when you could sit on the floor, why should a single person have a double bed, etc, etc.!!


 
Posted : 13/07/2023 1:14 pm
kelvin reacted
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It’s not just businesses, you could apply your questions to almost everything in life – why have a sofa when you could sit on the floor, why should a single person have a double bed, etc, etc.!!

I think OPs issue is that businesses pay tax based on the profit they make, so if they fritter all that profit on MacBooks and posh pickups, that’s less profit to be taxed.


 
Posted : 13/07/2023 1:25 pm
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Finally a business who owns and operates quite a bit of plant and machinery to do their work. The owner loves having and using all this kit.

I’m sorry, your point is?


 
Posted : 13/07/2023 1:30 pm
footflaps reacted
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If it’s used just for work. End of story. Buying the minimum sized van or the most basic computers or plant you can get away with might be short sighted. The needs of a business often grow; having the assets ready for change could be good planning.


 
Posted : 13/07/2023 1:33 pm
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But a lot is just image and creating the ‘experience’ – on the industrial estate near me there’s a Jaguar showroom that has plush leather all round, posh coffee, etc.

That will all be specified by the brand and the dealer has zero say in the matter. They will be regularly audited on the quality of their reception area, service waiting area etc and if anything isn't up to standards they will be forced to rectify.

The wife works for a major manufacturer and her job consists of 'your show room isn't up to scratch, you need to spend x million fixing it or we'll de-franchise you'. It's also, not a hollow threat, they regularly serve notice on dealers.


 
Posted : 13/07/2023 1:35 pm
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To allay the OPs concerns, the more MacBooks (among other expensive IT stuff) I sell, the more I earn, the more tax I pay, so swings and roundabouts.


 
Posted : 13/07/2023 1:38 pm
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I think OPs issue is that businesses pay tax based on the profit they make, so if they fritter all that profit on MacBooks and posh pickups, that’s less profit to be taxed.

OK, I get that, but Macbooks and posh pickups don't pay the mortgage or buy food - so these things can only be bought when there's enough profit left over after the basics in life have been satisfied.... i.e. 'living'.


 
Posted : 13/07/2023 1:41 pm
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To allay the OPs concerns, the more MacBooks (among other expensive IT stuff) I sell, the more I earn, the more tax I pay, so swings and roundabouts.

Could you not just sell those Ye Olde hand-held chalkboards instead?


 
Posted : 13/07/2023 1:42 pm
davros and kelvin reacted
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In the last month, I’ve been asked to price a DOT matrix printer, and windows XP, so close enough…


 
Posted : 13/07/2023 1:49 pm
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I bought a dog guard for a Land Rover once off a guy who had been given a budget to choose his own company car.
He chose a Land Rover Defender, which cost nowhere near his allowed budget, so he added on every possible extra he could think of, including a dog guard that he had no use for and immediately removed and sold.


 
Posted : 13/07/2023 1:52 pm
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I am staying quiet about one of my old employers (a "sustainable" product seller) who had a director with not one but two Aston Martin's - one as company car and one we knew had be paid for by company, could never really tell who / justified / held / allocated...it was kept at the back of the storage hangar for dry weekends and track days only.

And of course there is the local authority who purchased a few really rather choice open canoes and white water kayaks which were never seen stored at the outdoor centre, but funnily enough the boss had the exact same boats in his garage and always attended the seasonal stock take to 'tick off' the boats as being present...

It has always been so in some organisations.


 
Posted : 13/07/2023 1:56 pm
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OK, I get that, but Macbooks and posh pickups don’t pay the mortgage or buy food – so these things can only be bought when there’s enough profit left over after the basics in life have been satisfied…. i.e. ‘living’.

but if they aren’t bought, or cheaper ones are bought, there’s more left over for the good of the country


 
Posted : 13/07/2023 2:13 pm
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who had a director with not one but two Aston Martin’s – one as company car and one we knew had be paid for by company, could never really tell who / justified / held / allocated…

you should have asked for a go in it.
I assume it would have been classed a pool car to avoid paying BIK on it .


 
Posted : 13/07/2023 2:29 pm
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but if they aren’t bought, or cheaper ones are bought, there’s more left over for the good of the country

TBF I can imagine (irrespective of others' comments about the flow of money through the economy) that if you put every single small and medium-sized business in the entire UK together and calculated their combined stretching of what are, at the end of the day, legitimate business expenses, the figure would be far, far smaller than the organisations that do all they can to avoid paying their due taxes (ie, the likes of Amazon).


 
Posted : 13/07/2023 2:45 pm
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but if they aren’t bought, or cheaper ones are bought, there’s more left over for the good of the country

It's not quite that simple.

Buying a slightly nicer laptop than is strictly necessary puts more money back into the economy, which then gets taxed elsewhere (eg the salary or bonus of the MacBook salesperson) etc. Those businesses then grow and employ more people etc.

So its not as simple as the money is lost, it just circulates via a different path.


 
Posted : 13/07/2023 2:47 pm
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but if they aren’t bought, or cheaper ones are bought, there’s more left over for the good of the country

Not that simple


 
Posted : 13/07/2023 2:49 pm
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I know, I’m assuming that’s the OPs thinking.


 
Posted : 13/07/2023 2:51 pm
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I read somewhere that for every £1 extra that was directed to HMRC's budget, it would result in a gain of £6.40 in tax revenue?

I wonder why the Conservatives didn't do this to avoid having to make unnecessary cuts?


 
Posted : 13/07/2023 2:54 pm
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I don't have a problem with people having upgraded tools to do their job, if they need a computer then I don't think it's practical to judge what level they may need from the outside. However we all know of "small businessmen" who absolutely take the piss and put things that are nothing to do with their business through the business.


 
Posted : 13/07/2023 2:56 pm
 5lab
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if you want to see real excess in this world, take a look at low-end motorsport sponsorship. There's no way there's any money to be made back by sticking a "daves lawyers" sticker on the back of a group 4 911 (cost to run has to be 6 figures per year), yet somehow that's exactly what happens and Dave happens to be the team driver too..


 
Posted : 13/07/2023 2:58 pm
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I read somewhere that for every £1 extra that was directed to HMRC’s budget, it would result in a gain of £6.40 in tax revenue?

I imagine that only works up to a point eg high gain multiple for low hanging fruit, then it will tail off rapidly.


 
Posted : 13/07/2023 3:08 pm
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Since our local bank closed I simply must have an emtb to get to the nearest one.

We'd live in a better world if all businesses used ebikes (of any description) rather than cars to do their banking and post office runs and pick up those rolls of toilet paper described above, or deliver sandwiches around the trading estate...


 
Posted : 13/07/2023 3:08 pm
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Finally a business who owns and operates quite a bit of plant and machinery to do their work. The owner loves having and using all this kit.

Do they?

You see the occasional self employed haulier in an OTT HGV tractor, but I've never seen a digger driver turn up to site with anything other than the bare minimum they could hire for the task.

The rest ..... mehh.

Macbooks, most companies aren't all that IT literate, mac's and iCloud solve you all sorts of dropbox, onedrive, sharepoint and office server related pain,

Vans with optional extras, my boss had to be very apologetic when asking anyone to take the poverty spec transit on a job, the one with no AC, bluetooth and the asthmatic engine. It definitely cost him more in receipts for supersized cokes at service stations in the long run, and I'd turn up to clients in the summer with BO so bad even I could smell it.

Pricey Pickup truck, maybe/probably he's using it for personal use too, and there is a bit of a loophole there where you only have to pay a flat rate of BIK (£6k?) if it's a commercial vehicle. Whereas if they bought an estate car they would pay a lot more. This explains why "commercial" spec LR Discoveries are the biggest seller in their class, because there's an entire industry set up around them to retrofit with leather seats and electric windows etc. You can usually spot them as they often still have black wing mirrors and other bits of trim where the "car" version has body coloured panels there. At that level it's a loophole, at your average builder using the work van to drive to a trail center, then as long as they're accounting for the fuel it's just an allowance that the BIK of driving a van, however many options you tick, is no better than a poverty spec hatchback for most people despite the £50k list price, so it's a case of paying BIK at poverty spec hatchback rates, or pay yourself, pay tax and then buy a poverty spec hatchback which nets roughly the same tax.


 
Posted : 13/07/2023 3:30 pm
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We’d live in a better world if all businesses used ebikes (of any description) rather than cars to do their banking and post office runs and pick up those rolls of toilet paper described above, or deliver sandwiches around the trading estate…

I saw a UPS one yesterday on a cycle path in Cambridge!


 
Posted : 13/07/2023 3:34 pm
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if you want to see real excess in this world, take a look at low-end motorsport sponsorship. There’s no way there’s any money to be made back by sticking a “daves lawyers” sticker on the back of a group 4 911 (cost to run has to be 6 figures per year), yet somehow that’s exactly what happens and Dave happens to be the team driver too..

I believe the lower echelons of Formula 1 used to be much the same too.  Although at a different order of magnitude.


 
Posted : 13/07/2023 3:39 pm
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I’m happier they are spending money rather than hoarding it as that’s what makes an economy.

Can you send me £50 instead of hoarding it?

 if it looks like you are going to make a profit and therefore pay corporation tax, you can reduce that by buying stuff like Macbook Pros, and what will serve the business better? Paying more to HMRC or having some decent new laptops?

It is not a good thing to reduce profits by buying unnecessary crap, even if that reduces the amount of corporation tax payable.


 
Posted : 13/07/2023 4:47 pm
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So its not as simple as the money is lost, it just circulates via a different path.

Tax revenue is immediately spent in the UK (apart from interest repayment, which tbf could go anywhere) overwhelmingly for the benefit of UK people (despite the best efforts of our current government) - pensions, benefits, schools, hospitals, roads and other tedious but very desirable stuff.
https://obr.uk/forecasts-in-depth/brief-guides-and-explainers/public-finances

Money spent on Apple stuff goes to Taiwanese assembly plants and Apple shareholders via fifteen offshore companies, mysteriously none of which end up paying much tax at all.

It's totally mad to suggest that money spent on crap consumption is just as good as money spent on tax. Keynesian Demand Management doesn't mean "spending money somewhere is as good spending money anywhere".


 
Posted : 13/07/2023 4:57 pm
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It’s totally mad to suggest that money spent on crap consumption is just as good as money spent on tax.

Just as well no one did and you made that phrase up...


 
Posted : 13/07/2023 5:09 pm
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Money spent on Apple stuff goes to Taiwanese assembly plants and Apple shareholders via fifteen offshore companies, mysteriously none of which end up paying much tax at all.

For any of you business owners looking to put some of your Apple business (necessary or otherwise) through a UK company, paying UK tax, give me a shout 😉


 
Posted : 13/07/2023 5:14 pm
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Save your anger for the mega corps like Amazon, making billions and paying virtually no tax


 
Posted : 13/07/2023 5:42 pm
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Save your anger for the mega corps like Amazon, making billions and paying virtually no tax

What ? Not when it’s easier to go after the "small man" business owners. The country is going to hell in a handcart and its all their fault, because they didn't want to give a bigger share of their profits to the **** in charge to spaff up the wall 😉


 
Posted : 13/07/2023 6:01 pm
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I think we should all watch this:

https://www.amazon.co.uk/Britains-Trillion-Pound-Paradise-Inside/dp/B07R7Y87PS

Lower quality version here if you don't have amazon prime 😉

Check out how Facebook operate at 26mins in.


 
Posted : 13/07/2023 6:38 pm
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Well this thread took off! Some good points being made and questions asked, which I'll try to catch up with.

What?

I think OPs issue is that businesses pay tax based on the profit they make, so if they fritter all that profit on MacBooks and posh pickups, that’s less profit to be taxed.

Yes, some of them with some of it. Thought my first sentence was clear but could have been better.

You need to look at the cost of ownership across the life of the equipment. A decent business-class laptop (either Windows or Mac) will run fine for ten years and not constantly annoy you with freezing under load like really cheap stuff does. When you’re busy, you don’t want to be losing time because you tried to cheap out on your laptop. Also, if you have to haul it around town, something light and with good battery life will save you a ton of misery.

I can see that better / more reliable kit is clearly justified expenditure, how many professional tradesmen use B&Q own brand power tools vs DeWalt and Makita

I agree, but I'm talking about buying luxury (£2k laptop) instead of professional quality (£1k) - not about cheaping out (£300).

But a lot is just image and creating the ‘experience’ – on the industrial estate near me there’s a Jaguar showroom that has plush leather all round, posh coffee, etc., just down the same road is a used car trader on a gravel forecourt with a portacabin as office. They both sell cars in the end.

Yes, not the type of unnecessary I had in mind.

When we ran our old business we’d also stay in decent hotels – are you saying we should’ve stayed in cheap (shit) ones instead?

No, just that you shouldn't be staying at the Ritz.

OP Smacks of jealousy if you ask me.

No, I think it's ok to have a conversation about potential injustices in contributions to the public purse, at a time when there are people struggling on both the paying and receiving end of it.


 
Posted : 13/07/2023 7:25 pm
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if you want to see real excess in this world, take a look at low-end motorsport sponsorship

That’s nothing compared to private jet ownership. Have it operated by a charter aviation company & a contract that it’s “available” for 3rd party hire to save VAT. But every time there is a possible charter, “oh the owner was thinking of flying that day” so it can be hired out!


 
Posted : 13/07/2023 7:33 pm
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I’m talking about buying luxury (£2k laptop) instead of professional quality (£1k) – not about cheaping out (£300).

I think it's entirely up to the business owners (or by proxy the managers they appoint etc) how they value the morale and productivity of their employees.


 
Posted : 13/07/2023 7:35 pm
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‘Professional quality’ laptops rather depend on the profession. Some need a £10k monster, others a £160 paperweight. Whisper it, but sometimes Apples really are the best thing for the job. (I should say, I’m not an Apple sales person, they’re just one manufacturer of hundreds we sell.)


 
Posted : 13/07/2023 7:38 pm
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HMRC barely have the resources to resolve large-scale fraud – there’s no way they can catch hundreds of thousands of people skimming off the top. Loads of businesses furloughed employees during covid, then made them work like normal. How long do you think it would take to get through that lot and prove it? Then how long to actually get the money back?

I realise much of it would be hard or a net negative gain to the treasury, yes, at least with they way things work now.

Either in extreme is potentially destructive and if done in an uncontrolled manner without the right financial assessments you’re fairly likely to be seeing someone like me professionally at some point to work out what’s got to be done with the broken shell of the business.

Great response (all of it).

So who should make the decision of what is the correct level of car / coffee / sofa / board room table?

I'm sure as a society we'd be capable of working that one out. We've done it for loads of other allowances and claimable expenses etc.

When they spend this money it is gone.

If they kept the money some of it would have gone to the taxman and some to their pocket, but they chose to spend it, not keep it.

When they spend this money, it pays the wages of whoever they bought it off, and they will pay some tax and buy things of someone else who will pay some tax.

I’m happier they are spending money rather than hoarding it as that’s what makes an economy.

This seems like different, much broader debate.

Are businesses not allowed to have nice stuff comrade?

I bought a fancy coffee machine through the business, it was entirely necessary for productivity.

Re: hiding profit, if it looks like you are going to make a profit and therefore pay corporation tax, you can reduce that by buying stuff like Macbook Pros, and what will serve the business better? Paying more to HMRC or having some decent new laptops?

Of course you are. I'm not talking about your coffee machine unless it was thousands of pounds.

It would serve the business and society better to spend £1k on business class laptops and make £1k of taxable profit with the change from a top of the line Macbook Pro.

‘Professional quality’ laptops rather depend on the profession. Some need a £10k monster, others a £160 paperweight. Whisper it, but sometimes Apples really are the best thing for the job. (I should say, I’m not an Apple sales person, they’re just one manufacturer of hundreds we sell.)

Yes, this is why I specified a job that definitely doesn't need anything special.


 
Posted : 13/07/2023 7:46 pm
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What a strange thing to query!

It’s not just businesses, you could apply your questions to almost everything in life – why have a sofa when you could sit on the floor, why should a single person have a double bed, etc, etc.!!

Missing the point. Having somewhere to sit other than the floor isn't a luxury.

The owner loves having and using all this kit.

I’m sorry, your point is?

That he is spending tax-free money for his personal satisfaction and enjoyment, with no business need.

I don’t have a problem with people having upgraded tools to do their job, if they need a computer then I don’t think it’s practical to judge what level they may need from the outside.

Agreed on both counts. You'd need something like cross-auditing done by similar companies, gets laborious, complicated, and open to abuse.

Save your anger for the mega corps like Amazon, making billions and paying virtually no tax

Good point, but there's plenty of anger to go round. Plus I think we're more inclined to be annoyed with visible things we can relate to than some big numbers on the news about Amazon.


 
Posted : 13/07/2023 8:04 pm
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My last two bikes were bought via my business. My vans, too. Plus all my tools.

TBF, I did used to work self employed as a bike guide till 2016 so the MTB WAS fair enough. I used my gravel bike to commute 15km each way on.

Both vans have been converted to campers, but I got round that saying it saved me booking a hotel when away on a job. Also meant I could deduct the expense of both items, materials and my time whilst converting.

I could have bought Einhell tools, but honestly no self respecting tradey is going to do that. Festool and Makita all the way.

Did used to buy tools, hang on to them for a year before flogging second hand (without box in the case of Festool). I bought six track saws, seven Makita drills and four SDS drills over the last eight years. If taxman asked you say the item was broken, stolen or lost.

Every time we went out for a meal or drinks I would keep the receipt. Surprising number of "Akuise" or "Besprechung" nights out.

So I feel guilty about it? Do I F....

I used to pay more corporation tax in Munich each year than BMW who used to pay zero.

Same as I don't feel guilty when doing a job for cash. Ultimately I'm going to spend that money and it'll go back into the economy.

There are so many folks twisting the system to suit themselves, you'd be a fool not to do the same.

One gut I built a terrace for last year had five cars, one for him, one for his missus and I've for each of the kids all registered at his surgery. He wanted an invoice for the job, but wanted it saying that we had built some wardrobes for the flats above his surgery so that he could deduct that against his tax. We declined and agreed we would drop 3% off our price if he paid cash.


 
Posted : 13/07/2023 8:27 pm
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Just for some balance, I actually went to CEX and bought some ram for my work computer, because it just couldn't do what I needed it to, 4gb to 16GB as I have multiple browsers and teams and Office open at the same time, not to mention a couple of remote desktops open. oh and multiple slack sessions too. An sharepoint, and god knows what else, all the cooperate bullshit that you have to have running.

I'd asked for an upgrade previously but IT basically told me to sod off as it was not needed.

It was £15 very well spent for my sanity, but even better spent when when IT did an audit and couldn't figure out how I was running an i3 with 16gb...as their audit spreadsheet obviously said it's wrong and impossible.


 
Posted : 13/07/2023 8:55 pm
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It would serve the business and society better to spend £1k on business class laptops and make £1k of taxable profit with the change from a top of the line Macbook Pro.

You're telling me what is best for my business based on......some fart you just did? Or is there some substance to your claim? You have no idea what I do, how I do it, nor what equipment is most efficient and appropriate for me. You're just blowing out your arse.


 
Posted : 13/07/2023 8:56 pm
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Honestly, I'm surprised we've got this far and no-one's mentioned the people actually making the rules who are sticking maintenance costs for the moat on their second home on expenses.  A Macbook is small apples in comparison.

I'm away with work just now.  I'm in a scabby Travelodge somewhere in Southwark, it's over £200 a night and the lazy bastards - I've just discovered - don't even service the room unless you request a "top-up."  Expenses are relative.


 
Posted : 13/07/2023 9:07 pm
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I'm also reflecting: last year I was part of a global gathering of charities in Salzburg. We stayed in a rather nice hotel, fully catered, with a private piano recital, resident artist, private tours of the house (sound of music was filmed there) and all sorts of niceties for 6 days.

That was very luxurious, and arguably a Premier Inn was more appropriate...

I'm back for another 5 days this autumn too.

So dob me in...


 
Posted : 13/07/2023 9:09 pm
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The idea that it's somehow wrong for business to treat their staff with anything more than the barest minimum of decency....it's just bizarre. Where could such an idiotic notion have come from?

They might make more money for a month if they did. They might lose their best staff next.

You might as well argue that they shouldn't pay more than the minimum wage also, to all staff. It would be a similar level of idiocy.


 
Posted : 13/07/2023 9:27 pm
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You’re telling me what is best for my business based on……some fart you just did? Or is there some substance to your claim? You have no idea what I do, how I do it, nor what equipment is most efficient and appropriate for me. You’re just blowing out your arse.

I wasn't telling you specifically anything. I was providing an example to illustrate the point that in some cases it's very obvious that someone is buying themselves an extravagant treat tax-free.

The idea that it’s somehow wrong for business to treat their staff with anything more than the barest minimum of decency….it’s just bizarre. Where could such an idiotic notion have come from?

Agreed. That's not my opinion and I haven't criticised anyone for doing that.


 
Posted : 13/07/2023 10:22 pm
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The idea that it’s somehow wrong for business to treat their staff with anything more than the barest minimum of decency….it’s just bizarre. Where could such an idiotic notion have come from?

They might make more money for a month if they did. They might lose their best staff next.

You might as well argue that they shouldn’t pay more than the minimum wage also, to all staff. It would be a similar level of idiocy.

They’ll all be quiet quitting by the end of the week


 
Posted : 13/07/2023 10:27 pm
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No, I think it’s ok to have a conversation about potential injustices in contributions to the public purse, at a time when there are people struggling on both the paying and receiving end of it

Apologies @bikesandboots, I was just taking the piss really, but it was early. Maybe I should have added a winky face or something.


 
Posted : 13/07/2023 10:30 pm
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I think I’m on something like my 14th mouse in 8 years ( pc not the vermin type).
I used to buy £10 cheapies, then decided about 18 months ago to buy a super duper £100 gaming mouse and it’s still going strong. Luxury price for a mere mouse , but I’ve spent more on the cheapies in total .
(Cad drafting 10-12 hours a day clicking buttons all day long tends to kill them )


 
Posted : 13/07/2023 10:35 pm
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I think I’m on something like my 14th mouse in 8 years ( pc not the vermin type).
I used to buy £10 cheapies, then decided about 18 months ago to buy a super duper £100 gaming mouse and it’s still going strong. Luxury price for a mere mouse , but I’ve spent more on the cheapies in total .
(Cad drafting 10-12 hours a day clicking buttons all day long tends to kill them

This is an excellent example.

I have a logitec mx518 mouse, it must be at least 15 years old now.

To paraphrase Gandalf, "He's the lord of all mice, and he's been my friend through many dangers."

I don't know what the hell I'm going to do if/when it packs in, probably buy the reimagined 'legendary' version, but they are about £80 which is frankly stupid money, the origeonals were only about £40.


 
Posted : 13/07/2023 11:07 pm
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Couple of further comments from me...

Half these nice things (well most of them) are probably on the never never (HP, lease, contract hire etc). The days of owning company cars and machinery outright are long gone with the explosion in asset based finance in the UK since the late 90s.

Also if you buy a £100k SUV you don't get an immediate deduction against current year revenue for tax but you're getting a part of its cost allowed each year (depending on how it is financed or hired that amount may be different). The user and the company are potentially paying extra employment taxes especially if it's a high CO2, high value status symbol type compared to a tiny eco car.

Same with bigger plant and equipment - you get allowed part of its value each year against tax over time not the headline price.

Edit... I forgot to say a lot of this is timing differences and ultimately you would get the relief over a period.

There is or was special rules about IT equipment.

Hence the buying shiny goods to reduce taxes is more nuanced than immediate savings.

A few seeming extravagances may make a nicer workplace and enhance profits. Unrestrained greed and lack of control or Scrooge style penny pinching will ultimately lead to trouble.


 
Posted : 13/07/2023 11:08 pm
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