Our website is made possible by displaying online advertisements to our visitors.
Please consider supporting us by disabling your ad blocker.
-
Originally Posted by
Benny Smyth
What can the taxman do - fine you for selling something for less than it's worth? And who decides what something is worth?
It's the cost of trying to fight the taxman that will send you under.
It can seem very easy to do at the time, but if it bites you on the arse, it'll bite very hard.
Much easier to stay on the right side of the tax rules, and you'll never need to worry about looking over your shoulder.
-
Resident Antagonist
Originally Posted by
rth_discos
It's the cost of trying to fight the taxman that will send you under.
It can seem very easy to do at the time, but if it bites you on the arse, it'll bite very hard.
Much easier to stay on the right side of the tax rules, and you'll never need to worry about looking over your shoulder.
But what I have suggested is, as far as my understanding goes, perfectly legal.
-
Originally Posted by
DazzyD
I know people in the housing sector that have split their property portfolios in to smaller groups and managed my newly-formed businesses just to lessen their tax liability.
That's tax evasion then. HMRC takes a very dim view of trying to avoid the vat threshold by "splitting up" the company.
All seems fine until they discover, and back date the VAT that should have been owed.
Originally Posted by
Benny Smyth
But what I have suggested is, as far as my understanding goes, perfectly legal.
Possibly - I don't know for sure, but still seems like tax evasion to me.
However, if the business were to run into financial difficulties, you could be accused of wrongful trading because you were selling assets at less than market value, and therefore become personally liable for the outstanding debts.
Last edited by Excalibur; 25-02-2015 at 04:21 PM.
Reason: Merged posts
-
Resident Antagonist
Originally Posted by
rth_discos
Possibly - I don't know for sure, but still seems like tax evasion to me.
However, if the business were to run into financial difficulties, you could be accused of wrongful trading because you were selling assets at less than market value, and therefore become personally liable for the outstanding debts.
You cannot be held personally liable for a LTD company's debts.
-
Originally Posted by
Benny Smyth
You cannot be held personally liable for a LTD company's debts.
Not strictly true.
As a director of a company you have duties and responsibilities, as required by legal regulations. If you fail to uphold these responsibilities you could be accused of wrongful trading and held personally liable for the repayment of certain company debts.
Certain conditions can lead to a penalty of up to 7 years in prison, as well as personal liability for company debts.
-
Originally Posted by
Benny Smyth
You cannot be held personally liable for a LTD company's debts.
Oh yes you can, that used to be the case but the law's been changed and these days the veil of limited liability can be lifted if it can be shown the directors of the company have acted fraudulently or in an improper manner. Their creditors can them come after them personally, for any assets they may own, including houses, cars, investments etc. The directors can also be disqualified from holding directorships in other companies for a period of time. That legalisation has been in force for many years now to combat the 'long firm' scams common in the 60's 70's.
Originally Posted by
Benny Smyth
But what I have suggested is, as far as my understanding goes, perfectly legal.
I can assure it is certainly not legal, and would land you in hot water if discovered. The odds are you would probably get away with it, but if the company went bust and was put into the hands of the official receiver it would be a different matter altogether if he decided to investigate it.
Inside every old person, is a young person wondering 'What The Hell Happened'. Tempus Fugit
Disco 4 Hire
-
Heavy stuff!!
Now, apart from one or two exceptions, as my sole customer is a Corporate, you would think it would make sense for me to register for VAT as all of my invoices were being paid by a VAT resistered business who would be able to reclaim the VAT.
The example goes: Currently I charge them £200. They charge their customer (normally a member of the public as it is for a wedding/birthday party etc) said £200 but have to add on the 20% VAT, making the price to the cistomer £240. They may well add on their mark up (including VAT) making the final fee more than that.
If I were to register for VAT, I would then have to invoice them for £240 inclusive of VAT. £200 goes into my purse and £40 I post of to that nice Mr Osbourne. SO I still end up with £200 as now but a mountain of extra paperwork.
The downside would be, as has been said, if my customers were general public consumers themselves who could not reclaim the VAT, who would be hit with an instant 20% rise in the prices I was charging (or I would have to take a 16.67% cut in earnings). These only amount to two or three a year, so its not really relevant to me.
Where of course it would save me money is that every business purchase I make I would be able to reclaim the 20% VAT from that purchase. Given that, for all but a very small amount of items, everything carries 20% VAT, expenditure would reduce by 16.66%. But again, I have an extra level of paperwork and headaches to contend with.
I did look at this several years ago and decided that the benefit did not outweigh the extra work and hassle involved. During my illness last year, I have another review and came to the same decision. One extra factor was that all of the DJs covering me , whether solo or from the agency, none of them were VAT registered. So I decided keep the Status Quo (other rock bands are available).
-
Thanks so much for all the reply s.
I have decided to put it on hold for now LOL .. I am not a LTD company btw! I was mostly thinking the benefits could have been the fact that i am investing more in the P.A hire side of the business- ie going to be purchasing loads of gear over the next few years and with the possibility of gaining 20% back on those purchases was what was enticing me to VAT reg.
I had a meeting with a friend last night who runs a very successful club events night, record label and merchandise business. He was telling me the story of his brother who had a visit from the VAT man and it was not pretty. They took all computers, mobile phones closed his business for a day and even read all his private mail. Lucky he was innocent of any wrong doings. He also mentioned he had just recently paid 600 quid in vat for a DJ he hired for one of his big nights so was tempted to go down the VAT route. But his brother said run a mile! its the worst thing he has done for his business.
As most folk have said here the benefits don't out weigh the extra work involved. Maybe in the future but for now no. You can claim up to 4 years of back paid VAT so maybe in 4 years time lol
-
My advice?
Go and speak to an accountant.
They will give you professional advice.
There is way too much rubbish in this thread that people actually aren't sure about as they are DJs and not accountants.
Speak to the people that know.
-
Originally Posted by
Solitaire Events Ltd
My advice?
Go and speak to an accountant.
They will give you professional advice.
There is way too much rubbish in this thread that people actually aren't sure about as they are DJs and not accountants.
Speak to the people that know.
I'm unique then as I am a DJ who qualified as an accountant.
Posting Permissions
- You may not post new threads
- You may not post replies
- You may not post attachments
- You may not edit your posts
-
Forum Rules